x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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46-1339639
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(State or jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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10 S. Wacker Drive, Suite 2500
Chicago, Illinois
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60606
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.01 per share
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The Nasdaq Global Select Market
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6.375% Notes due 2025
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The Nasdaq Global Select Market
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6.50% Notes due 2025
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The Nasdaq Global Select Market
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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1940 Act
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Investment Company Act of 1940, as amended
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Administration Agreement
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Administration agreement between the Company and OFS Services dated November 7, 2012
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Advisers Act
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Investment Advisers Act of 1940, as amended
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Annual Distribution Requirement
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Distributions to our stockholders, for each taxable year, of at least 90% of our ICTI
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ASC
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Accounting Standards Codification, as issued by the FASB
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ASC Topic 606
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ASC Topic 606, "Revenue From Contracts With Customers"
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ASC Topic 820
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ASC Topic 820, "Fair Value Measurements and Disclosures"
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ASC Topic 946
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ASC Topic 946, "Financial Services-Investment Companies"
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ASU
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Accounting Standards Updates, as issued by the FASB
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BDC
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Business Development Company under the 1940 Act
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BLA
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Business Loan Agreement, as amended, with Pacific Western Bank, as lender, which provides the Company with a senior secured revolving credit facility
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Board
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The Company's board of directors
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CLO
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Collateralized loan obligation
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Code
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Internal Revenue Code of 1986, as amended
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DRIP
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Distribution reinvestment plan
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EBITDA
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Earnings before interest, taxes, depreciation, and amortization
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Exchange Act
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Securities Exchange Act of 1934, as amended
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FASB
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Financial Accounting Standards Board
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FDIC
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Federal Deposit Insurance Corporation
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GAAP
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Accounting principles generally accepted in the United States
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HPCI
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Hancock Park Corporate Income, Inc., a non-traded BDC with an investment strategy similar to the Company for whom OFS Advisor serves as investment adviser
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ICTI
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Investment company taxable income, as defined in the Code, which is generally net ordinary income plus net short-term capital gains in excess of net long-term capital losses
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Investment Advisory Agreement
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Investment advisory agreement between the Company and OFS Advisor dated November 7, 2012
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IPO
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Initial Public Offering
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LIBOR
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London Interbank Offered Rate
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Net Loan Fees
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The cumulative amount of fees, such as discounts, premiums and amendment fees that are deferred and recognized as income over the life of the loan.
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OCCI
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OFS Credit Company, Inc., a closed-end management investment company that has registered as an investment company under the 1940 Act that primarily invests in CLO debt and subordinated (i.e., residual or equity) securities
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Offering
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Follow-on public offering of 3,625,000 shares of our common stock in April 2017
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OFS Advisor
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OFS Capital Management, LLC, a wholly owned subsidiary of OFSAM and registered investment adviser under the Advisers Act
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OFSC
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Orchard First Source Capital, Inc., a wholly owned subsidiary of OFSAM
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OFS Capital WM
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OFS Capital WM, LLC, a wholly owned investment-company subsidiary of the Company
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OFS Services
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OFS Capital Services, LLC, a wholly owned subsidiary of OFSAM and affiliate of OFS Advisor
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OFSAM
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Orchard First Source Asset Management, LLC, a full-service provider of capital and leveraged finance solutions to U.S. Corporations
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Prime Rate
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United States Prime interest rate
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PWB Credit Facility
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Senior secured revolving credit facility between the Company and Pacific Western Bank, as lender
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RIC
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Regulated investment company under Subchapter M of Code
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SBA
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U.S. Small Business Administration
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SBIC
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A fund licensed under the SBA small business investment company program
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SBIC Acquisition
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The Company's acquisition of the remaining ownership interests in SBIC I LP and SBIC I GP, LLC on December 4, 2013, making SBIC I LP a wholly owned subsidiary of the Company
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SBIC Act
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Small Business Investment Act of 1958, as amended
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SBIC I LP
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OFS SBIC I, LP, a wholly owned SBIC subsidiary of the Company
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SEC
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U.S. Securities and Exchange Commission
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The Order
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We received exemptive relief from the SEC to permit us to co-invest in portfolio companies with certain funds managed by Affiliated Funds in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions.
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Transaction Price
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The cost of an arm's length transaction occurring in the same security
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Unsecured Notes
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The combination of the Unsecured Notes Due April 2025 and the Unsecured Notes Due October 2025
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Unsecured Notes Due April 2025
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The Company's $50.0 million aggregate principal amount of 6.375% notes due April 30, 2025
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Unsecured Notes Due October 2025
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The Company's $48.5 million aggregate principal amount of 6.5% notes due October 30, 2025
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Valuation Methodology Change
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We changed the primary method used to value certain of our investments as of December 31, 2016, from the income approach to the market approach
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WM Credit Facility
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Secured revolving line of credit with Wells Fargo Bank, N.A, terminated on May 28, 2015
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•
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number of employees between 150 and 2,000;
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•
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revenues between $15 million and $300 million;
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annual EBITDA between $3 million and $50 million;
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generally, private companies owned by private equity firms or owners/operators;
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enterprise value between $10 million and $500 million;
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effective and experienced management teams;
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defensible market share;
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solid historical financial performance, including a steady stream of cash flow;
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high degree of recurring revenue;
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diversity of customers, markets, products and geography; and
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differentiated products or services.
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selecting investments that we believe have a very low probability of loss;
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•
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requiring a total return on our investments (including both interest and potential equity appreciation) that we believe will compensate us appropriately for credit risk; and
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negotiating covenants in connection with our investments that afford our portfolio companies as much flexibility in managing their businesses as possible, consistent with the preservation of our capital. Such restrictions may include affirmative and negative covenants, default penalties, lien protection, change of control provisions and board rights, including either observation or rights to a seat on the board of directors under some circumstances.
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•
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determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;
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assists us in determining what securities we purchase, retain or sell;
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identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and
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executes, closes, services and monitors the investments we make.
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no incentive fee in any calendar quarter in which the pre-incentive fee net investment income does not exceed the hurdle rate;
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100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.5% in any calendar quarter. We refer to this portion of our pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 2.5%) as the “catch-up” provision. The catch-up is meant to provide OFS Advisor with 20.0% of the pre-incentive fee net investment income as if a hurdle rate did not apply if this pre-incentive fee net investment income exceeds 2.5% in any calendar quarter; and
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20.0% of the amount of our pre-incentive fee net investment income, if any, that exceeds 2.5% in any calendar quarter.
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Hurdle rate(1) = 2.0%
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Management fee(2) = 0.44%
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Other estimated expenses (legal, accounting, custodian, transfer agent, etc.)(3) = 0.20%
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Investment income (including interest, dividends, fees, etc.) = 1.25%
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Pre-incentive fee net investment income (investment income – (management fee + other expenses)) = 0.61%
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Investment income (including interest, dividends, fees, etc.) = 2.80%
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Pre-incentive fee net investment income (investment income – (management fee + other expenses)) = 2.16%
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Incentive Fee
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=
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100% × “Catch-Up” + the greater of 0%
AND
(20% × (pre-incentive fee net investment income – 2.5%))
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=
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(100% ×(2.16% – 2.0%)) + 0%
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=
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100% × 0.16%
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=
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0.16%
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•
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Investment income (including interest, dividends, fees, etc.) = 3.50%
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Pre-incentive fee net investment income (investment income – (management fee + other expenses)) = 2.86%
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Incentive Fee
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=
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100% × “Catch-Up” + the greater of 0%
AND
(20% × (pre-incentive fee net investment income – 2.5%))
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=
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(100% × (2.5% – 2.0%)) + (20% × (2.86% – 2.5%))
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=
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0.5% + (20% × 0.36%)
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=
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0.5% + 0.07%
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=
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0.57%
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•
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Year 1: $20 million investment made in Company A (“Investment A”), and $30 million investment made in Company B (“Investment B”)
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•
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Year 2: Investment A is sold for $50 million and fair market value (“FMV”) of Investment B determined to be $32 million
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Year 3: FMV of Investment B determined to be $25 million
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Year 4: Investment B sold for $31 million
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Year 1: None (no sales transactions)
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Year 2: $6 million (20% multiplied by $30 million realized capital gains on sale of Investment A)
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Year 3: None; $5 million (20% multiplied by $30 million cumulative realized capital gains less $5 million cumulative unrealized capital depreciation) less $6 million (Capital Gains Fee paid in Year 2)
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Year 4: $200,000; $6.2 million (20% multiplied by $31 million cumulative realized capital gains) less $6 million (Capital Gains Fee paid in Year 2)
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Year 1: $20 million investment made in Company A (“Investment A”), $30 million investment made in Company B (“Investment B”) and $25 million investment made in Company C (“Investment C”)
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•
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Year 2: Investment A sold for $50 million, FMV of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million
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•
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Year 3: FMV of Investment B determined to be $27 million and Investment C sold for $30 million
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•
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Year 4: FMV of Investment B determined to be $35 million
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Year 5: Investment B sold for $20 million
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Year 1: None (no sales transactions)
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Year 2: $5 million (20% multiplied by $30 million realized capital gains on Investment A less $5 million unrealized capital depreciation on Investment B)
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Year 3: $1.4 million; $6.4 million (20% multiplied by $32 million ($35 million cumulative realized capital gains on Investment A and Investment C less $3 million cumulative unrealized capital depreciation on Investment B)) less $5 million (Capital Gains Fee paid in Year 2)
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Year 4: $0.6 million; $7 million (20% multiplied by $35 million (cumulative realized capital gains on Investment A and Investment C)) less $6.4 million (cumulative Capital Gains Fee paid in all prior years)
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Year 5: None; $5 million (20% multiplied by $25 million ($35 million cumulative realized capital gains on Investments A and C less $10 million realized capital losses on Investment B)) less $7 million (cumulative Capital Gains Fee paid in all prior years))
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•
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the nature, quality and extent of the advisory and other services to be provided to us by OFS Advisor;
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the fee structures of comparable externally managed BDCs that engage in similar investing activities;
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our projected operating expenses and expense ratio compared to BDCs with similar investment objectives;
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any existing and potential sources of indirect income to OFS Advisor from its relationship with us and the profitability of that relationship, including through the Investment Advisory Agreement;
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information about the services to be performed and the personnel performing such services under the Investment Advisory Agreement; and
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the organizational capability and financial condition of OFS Advisor and its affiliates.
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(a)
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Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the 1940 Act as any issuer that:
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is organized under the laws of, and has its principal place of business in, the United States;
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is not an investment company (other than a small business investment company wholly-owned by the BDC) or a company that would be an investment company but for certain exclusions under the 1940 Act; and
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satisfies either of the following:
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◦
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does not have any class of securities listed on a national securities exchange or has any class of securities listed on a national securities exchange subject to a $250 million market capitalization maximum; or
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◦
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is controlled by a BDC or a group of companies including a BDC, the BDC actually exercises a controlling influence over the management or policies of the eligible portfolio company, and, as a result, the BDC has an affiliated person who is a director of the eligible portfolio company;
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(b)
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Securities of any eligible portfolio company which we control;
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(c)
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Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident to such a private transaction, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities, was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements;
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(d)
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Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company;
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(e)
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Securities received in exchange for or distributed on or with respect to securities described above, or pursuant to the exercise of warrants or rights relating to such securities; and
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(f)
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Cash, cash equivalents, U.S. government securities or high-quality debt securities that mature in one year or less from the date of investment.
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maintain our qualification as a RIC; and
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satisfy the Annual Distribution Requirement;
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continue to qualify as a BDC under the 1940 Act at all times during each taxable year;
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derive in each taxable year at least 90% of our gross income from dividends, interest, certain payments with respect to loans of stock and securities, gains from the sale or other disposition of stock, securities, or foreign currencies and other income (including but not limited to gains from options, futures or forward contracts) derived with respect to our business of investing in such stock, securities or currencies, and net income derived from interests in “qualified publicly traded partnerships,” as such term is defined in the Code (the "90% Income Test"); and
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•
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diversify our holdings so that at the end of each quarter of the taxable year:
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•
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at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities, with such other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of our assets and 10% of the outstanding voting securities of such issuer; and
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•
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no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that we control (as determined under applicable tax rules) and that are engaged in the same, similar or related trades or businesses or of one or more qualified publicly traded partnerships (the “Diversification Tests”).
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Item 1A.
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Risk Factors
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•
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The higher interest or dividend rates of PIK instruments reflect the payment deferral and increased risk associated with these instruments, and PIK instruments often represent a significantly higher risk than non-PIK instruments.
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•
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Even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is supposed to occur at the maturity of the obligation.
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PIK instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. PIK income may also create uncertainty about the source of our cash distributions.
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For accounting purposes, any cash distributions to stockholders representing PIK income are not treated as coming from paid-in capital, even though the cash to pay them comes from the offering proceeds. As a result, despite the fact that a distribution representing PIK income could be paid out of amounts invested by our stockholders, the 1940 Act does not require that stockholders be given notice of this fact by reporting it as a return of capital.
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•
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PIK interest or dividends have the effect of generating investment income at a compounding rate, thereby further increasing the incentive fees payable to OFS Advisor. Similarly, all things being equal, the deferral associated with PIK interest or dividends also decreases the investment principal-to-value ratio at a compounding rate.
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Assumed Return on Our Portfolio (Net of Expenses)
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(10)%
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(5)%
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—%
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5%
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10%
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Corresponding return to common stockholder
(1)
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(30.00)%
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(18.67)%
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(7.33)%
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4.01%
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15.34%
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•
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investment guidelines and/or restrictions, if any, set forth in the applicable organizational, offering or similar documents for the investment vehicles;
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•
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the status of tax restrictions and tests and other regulatory restrictions and tests;
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•
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risk and return profile of the investment vehicles;
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•
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suitability/priority of a particular investment for the investment vehicles;
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•
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if applicable, the targeted position size of the investment for the investment vehicles
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•
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level of available cash for investment with respect to the investment vehicles;
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•
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total amount of funds committed to the investment vehicles; and
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•
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the age of the investment vehicles and the remaining term of their respective investment periods, if any.
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•
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a comparison of the portfolio company’s securities to publicly traded securities;
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•
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the enterprise value of a portfolio company;
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•
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the nature and realizable value of any collateral;
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•
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the portfolio company’s ability to make payments and its earnings and discounted cash flow;
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•
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the markets in which the portfolio company does business; and
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•
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changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made in the future and other relevant factors.
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•
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increase or maintain in whole or in part our position as a creditor or equity ownership percentage in a portfolio company;
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•
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exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or
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•
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preserve or enhance the value of our investment.
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•
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the ability to cause the commencement of enforcement proceedings against the collateral;
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•
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the ability to control the conduct of such proceedings;
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•
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the approval of amendments to collateral documents;
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•
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releases of liens on the collateral; and
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•
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waivers of past defaults under collateral documents.
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•
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significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which is not necessarily related to the operating performance of these companies;
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•
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exclusion of our common stock from certain market indices, such as the Russell 2000 Financial Services Index, which could reduce the ability of certain investment funds to own our common stock and put short-term selling pressure on our common stock;
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•
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changes in regulatory policies or tax guidelines, particularly with respect to RICs, SBICs or BDCs;
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•
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loss of RIC or BDC status;
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•
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failure of SBIC I LP to maintain its status as an SBIC;
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•
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our origination activity, including the pace of, and competition for, new investment opportunities;
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•
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changes or perceived changes in earnings or variations in operating results;
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•
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changes or perceived changes in the value of our portfolio of investments;
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•
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changes in accounting guidelines governing valuation of our investments;
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•
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any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;
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•
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the inability to secure additional debt or equity capital;
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•
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potential future sales of common stock or debt securities convertible into or exchangeable or exercisable for our common stock or the conversion of such securities;
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•
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departure of OFS Advisor’s, OFSC’s or any of their affiliates’ key personnel;
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•
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operating performance of companies comparable to us;
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•
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general economic trends and other external factors; and
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•
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loss of a major funding source.
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•
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issue securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the Unsecured Notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the Unsecured Notes to the extent of the values of the assets securing such debt, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the Unsecured Notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in those entities and therefore rank structurally senior to the Unsecured Notes with respect to the assets of our subsidiaries, in each case other than an incurrence of indebtedness or other obligation that would cause a violation of Section 18(a)(1)(A) as modified by such provisions of Section 61(a) of the 1940 Act as may be applicable to us from time to time or any successor provisions, whether or not we continue to be subject to such provisions of the 1940 Act, but giving effect, in each case, to any exemptive relief granted to us by the SEC. Currently, these provisions generally prohibit us from making additional borrowings, including through the issuance of additional debt or the sale of additional debt securities, unless our asset coverage, as defined in the 1940 Act, equals at least 200% (or 150% on and after May 3, 2019) after such borrowings.
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•
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pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities ranking junior in right of payment to the Unsecured Notes, including subordinated indebtedness, in each case other than dividends, purchases, redemptions or payments that would cause our asset coverage to fall below the threshold specified in Section 18(a)(1)(B) as modified by such provisions of Section 61(a) of the 1940 Act as may be applicable to us from time to time or any successor provisions, giving effect to (i) any exemptive relief granted to us by the SEC and (ii) no-action relief granted by the SEC to another BDC (or to us if we determine to seek such similar no-action or other relief) permitting the BDC to declare any cash dividend or distribution notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified by such provisions of Section 61(a) of the 1940 Act as may be applicable to us from time to time in order to maintain the BDC’s status as a RIC under Subchapter M of the Code. These provisions generally prohibit us from declaring any cash dividend or distribution upon any class of our capital stock, or purchasing any such capital stock if our asset coverage, as defined in the 1940 Act, is below 200% (or 150% on and after May 3, 2019) at the time of the declaration of the dividend or distribution or the purchase and after deducting the amount of such dividend, distribution or purchase;
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•
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sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);
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•
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enter into transactions with affiliates;
|
•
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create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;
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•
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make investments; or
|
•
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create restrictions on the payment of dividends or other amounts to us from our subsidiaries.
|
Item 1B.
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Unresolved Staff Comments
|
Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
|
Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Period
|
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Total Number of Shares Purchased
|
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Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet be Purchased Under the Plans or Programs
|
||||||
October 1, 2018 through December 31, 2018
|
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300
|
|
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$
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10.29
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|
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300
|
|
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$
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9,997
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Total
|
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300
|
|
|
10.29
|
|
|
300
|
|
|
9,997
|
|
Item 6.
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Selected Consolidated Financial Data
|
|
For the Years Ended December 31,
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||||||||||||||||||
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2018
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2017
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2016
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2015
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2014
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||||||||||
Statement of Operations Data:
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|
|
|
|
|
||||||||||
Investment income
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
$
|
38,607
|
|
|
$
|
28,124
|
|
|
$
|
26,400
|
|
|
$
|
27,764
|
|
|
$
|
20,653
|
|
PIK interest income
|
1,193
|
|
|
1,508
|
|
|
1,194
|
|
|
1,206
|
|
|
683
|
|
|||||
Dividend income
|
315
|
|
|
482
|
|
|
475
|
|
|
245
|
|
|
124
|
|
|||||
Preferred equity PIK dividend income
|
906
|
|
|
1,399
|
|
|
1,433
|
|
|
1,116
|
|
|
446
|
|
|||||
Fee income
|
1,813
|
|
|
1,913
|
|
|
1,592
|
|
|
1,933
|
|
|
914
|
|
|||||
Total investment income
|
42,834
|
|
|
33,426
|
|
|
31,094
|
|
|
32,264
|
|
|
22,820
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Management fees
|
6,335
|
|
|
4,999
|
|
|
4,516
|
|
|
5,225
|
|
|
2,916
|
|
|||||
Incentive fees, net of waiver
|
4,387
|
|
|
2,962
|
|
|
3,333
|
|
|
2,627
|
|
|
1,253
|
|
|||||
Other expenses
|
13,727
|
|
|
9,588
|
|
|
9,100
|
|
|
11,001
|
|
|
9,516
|
|
|||||
Total expenses, net
|
24,449
|
|
|
17,549
|
|
|
16,949
|
|
|
18,853
|
|
|
13,685
|
|
|||||
Net investment income
|
18,385
|
|
|
15,877
|
|
|
14,145
|
|
|
13,411
|
|
|
9,135
|
|
|||||
Net realized gain (loss) on investments
|
(4,779
|
)
|
|
6,833
|
|
|
2,404
|
|
|
(1,562
|
)
|
|
(3,359
|
)
|
|||||
Net unrealized appreciation (depreciation) on investments
|
(4,034
|
)
|
|
(14,800
|
)
|
|
(2,721
|
)
|
|
6,382
|
|
|
4,164
|
|
|||||
Net increase in net assets resulting from operations
|
9,572
|
|
|
7,910
|
|
|
13,828
|
|
|
18,231
|
|
|
9,940
|
|
|||||
Per share data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net asset value
|
$
|
13.10
|
|
|
$
|
14.12
|
|
|
$
|
14.82
|
|
|
$
|
14.76
|
|
|
$
|
14.24
|
|
Net investment income
|
1.38
|
|
|
1.28
|
|
|
1.46
|
|
|
1.39
|
|
|
0.95
|
|
|||||
Net realized gain (loss) on investments
|
(0.36
|
)
|
|
0.55
|
|
|
0.25
|
|
|
(0.17
|
)
|
|
(0.35
|
)
|
|||||
Net unrealized appreciation (depreciation) on investments
|
(0.30
|
)
|
|
(1.19
|
)
|
|
(0.29
|
)
|
|
0.66
|
|
|
0.42
|
|
|||||
Net increase in net assets resulting from operations
|
0.72
|
|
|
0.64
|
|
|
1.43
|
|
|
1.89
|
|
|
1.03
|
|
|||||
Distributions declared
(1)
|
1.73
|
|
|
1.36
|
|
|
1.36
|
|
|
1.36
|
|
|
1.36
|
|
|||||
Total return based on market value
(7)
|
2.8
|
%
|
|
(4.7
|
)%
|
|
32.3
|
%
|
|
9.0
|
%
|
|
2.4
|
%
|
|||||
Balance sheet data at period end:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments, at fair value
|
$
|
396,797
|
|
|
$
|
277,499
|
|
|
$
|
281,627
|
|
|
$
|
257,296
|
|
|
$
|
312,234
|
|
Cash and cash equivalents
|
38,172
|
|
|
72,952
|
|
|
17,659
|
|
|
32,714
|
|
|
12,447
|
|
|||||
Other assets
|
6,452
|
|
|
7,327
|
|
|
5,744
|
|
|
4,666
(2)
|
|
|
11,823
(2)
|
|
|||||
Total assets
|
441,421
|
|
|
357,778
|
|
|
305,030
|
|
|
294,676
(2)
|
|
|
336,504
(2)
|
|
|||||
Debt
|
254,826
|
|
|
164,823
|
|
|
156,343
|
|
|
146,460
(2)
|
|
|
194,935
(2)
|
|
|||||
Total liabilities
|
266,398
|
|
|
169,442
|
|
|
161,252
|
|
|
151,664
(2)
|
|
|
199,033
(2)
|
|
|||||
Total net assets
|
175,023
|
|
|
188,336
|
|
|
143,778
|
|
|
143,012
|
|
|
137,471
|
|
|||||
Other data (unaudited):
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average yield on performing debt investments
(3) (6)
|
11.50
|
%
|
|
12.11
|
%
|
|
12.08
|
%
|
|
11.89
|
%
|
|
9.53
|
%
|
|||||
Weighted average yield on total debt investments
(4) (6)
|
11.12
|
%
|
|
11.59
|
%
|
|
11.72
|
%
|
|
11.84
|
%
|
|
9.41
|
%
|
|||||
Weighted average yield on total investments
(5) (6)
|
10.49
|
%
|
|
10.35
|
%
|
|
10.88
|
%
|
|
10.79
|
%
|
|
8.99
|
%
|
|||||
Number of portfolio companies at end of year
|
50
|
|
|
37
|
|
|
41
|
|
|
39
|
|
|
62
|
|
(1)
|
The return of capital portion of these distributions for the years ended December 31, 2018, 2017, 2016, 2015, and 2014, was
$0
, $0, $0.09, $0.23, and $0.72, respectively.
|
(2)
|
On January 1, 2016, we adopted ASU 2015-03 which requires that debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of the debt liability rather than as an asset. Adoption of ASU 2015-03 requires the changes to be applied retrospectively.
|
(3)
|
The weighted average yield on our performing debt investments is computed as (a) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees divided by (b) amortized cost of our debt investments, excluding debt investments in non-accrual status as of the balance sheet date.
|
(4)
|
The weighted average yield on our performing debt investments is computed as (a) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees divided by (b) amortized cost of our debt investments, including debt investments in non-accrual status as of the balance sheet date.
|
(5)
|
The weighted average yield on total investments is computed as (a) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees, plus the cash effective yield on our performing preferred equity investments divided by (b) amortized cost of our total investment portfolio, including debt investments in non-accrual status basis as of the balance sheet date.
|
(6)
|
The weighted average yield of our investments is not the same as a return on investment for our stockholders but, rather, the gross investment income from our investment portfolio before the payment of all of our fees and expenses. There can be no assurance that the weighted average yield will remain at its current level.
|
(7)
|
Calculation is ending market value less beginning market value, adjusting for dividends and distributions reinvested at prices obtained in the Company’s dividend reinvestment plan for the respective distributions.
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
our ability and experience operating a BDC or an SBIC, or maintaining our tax treatment as a RIC under Subchapter M of the Code;
|
•
|
our dependence on key personnel;
|
•
|
our ability to maintain or develop referral relationships;
|
•
|
our ability to replicate historical results;
|
•
|
the ability of OFS Advisor to identify, invest in and monitor companies that meet our investment criteria;
|
•
|
actual and potential conflicts of interest with OFS Advisor and other affiliates of OFSAM;
|
•
|
constraint on investment due to access to material nonpublic information;
|
•
|
restrictions on our ability to enter into transactions with our affiliates;
|
•
|
limitations on the amount of SBA-guaranteed debentures that may be issued by an SBIC;
|
•
|
our ability to comply with SBA regulations and requirements;
|
•
|
the use of borrowed money to finance a portion of our investments;
|
•
|
our increased ability to incur leverage pursuant to the SBCAA, beginning on May 3, 2019;
|
•
|
competition for investment opportunities;
|
•
|
the ability of SBIC I LP to make distributions enabling us to meet RIC requirements;
|
•
|
our ability to raise debt or equity capital as a BDC;
|
•
|
the timing, form and amount of any distributions from our portfolio companies;
|
•
|
the impact of a protracted decline in the liquidity of credit markets on our business;
|
•
|
the general economy and its impact on the industries in which we invest;
|
•
|
uncertain valuations of our portfolio investments;
and
|
•
|
the effect of new or modified laws or regulations governing our operations.
|
•
|
a determination as to whether the amendment is
|
◦
|
of such significance to deem it the consummation of the initial investment transaction and the acquisition of new Instruments (i.e., a "significant modification"), or
|
◦
|
a modification of those Instruments to be recognized over their remaining lives,
and
|
•
|
an additional allocation of consideration among newly acquired Instruments.
|
|
|
Fair Value at December 31, 2018
|
|
|
Range of Fair Value
|
||||||||
Investment Type
|
|
|
Low-end
|
|
High-end
|
||||||||
Debt investments:
|
|
|
|
|
|
|
|
|
|
|
|||
Senior Secured
|
|
$
|
295,087
|
|
|
|
$
|
289,637
|
|
|
$
|
300,772
|
|
Subordinated
|
|
$
|
44,540
|
|
|
|
43,891
|
|
|
45,189
|
|
||
|
|
|
|
|
|
|
|
||||||
Equity investments:
|
|
|
|
|
|
|
|
||||||
Preferred equity
|
|
$
|
14,613
|
|
|
|
13,528
|
|
|
15,057
|
|
||
Common equity and warrants
|
|
$
|
18,627
|
|
|
|
15,113
|
|
|
22,540
|
|
•
|
The Investment Advisory Agreement with OFS Advisor to manage our operating and investment activities. Under the Investment Advisory Agreement we have agreed to pay OFS Advisor an annual base management fee based on the average value of our total assets (other than cash and cash equivalents but including assets purchased with borrowed amounts and including assets owned by any consolidated entity) as well as an incentive fee based on our investment performance. See “Item 1—Management and Other Agreements” and “Item 8–Financial Statements and Supplementary Data–
Note 3
.”
|
•
|
The Administration Agreement with OFS Services, an affiliate of OFS Advisor, to provide us with the office facilities and administrative services necessary to conduct our operations. See “Item 1–Management and Other Agreements” and “Item 8–Financial Statements and Supplementary Data–
Note 3
.”
|
•
|
A license agreement with OFSAM, the parent company of OFS Advisor, under which OFSAM has agreed to grant us a non-exclusive, royalty-free license to use the name “OFS.” Under this agreement, we have a right to use the “OFS” name for so long as OFS Advisor or one of its affiliates remains our investment adviser. Other than with respect to this limited license, we have no legal right to the “OFS” name. This license agreement will remain in effect for so long as the Investment Advisory Agreement with OFS Advisor is in effect.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Senior secured debt investments
(1)
|
$
|
325,873
|
|
|
$
|
319,017
|
|
|
$
|
196,020
|
|
|
$
|
195,112
|
|
Subordinated debt investments
|
56,212
|
|
|
44,540
|
|
|
63,031
|
|
|
51,198
|
|
||||
Preferred equity
|
19,620
|
|
|
14,613
|
|
|
24,103
|
|
|
19,200
|
|
||||
Common equity and warrants
|
11,606
|
|
|
18,627
|
|
|
6,821
|
|
|
11,989
|
|
||||
Total
|
$
|
413,311
|
|
|
$
|
396,797
|
|
|
$
|
289,975
|
|
|
$
|
277,499
|
|
Total number of portfolio companies
|
50
|
|
|
50
|
|
|
37
|
|
|
37
|
|
(1)
|
Includes debt investments in which we have entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, we have agreed to receive our principal payments after the repayment of certain co-lenders pursuant to a payment waterfall. The aggregate amortized cost and fair value of these investments was
$68,207
and
$67,480
at
December 31, 2018
, respectively, and $21,709 and $21,919, at
December 31, 2017
, respectively.
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
South - US
|
$
|
124,795
|
|
|
30.2
|
%
|
|
$
|
126,123
|
|
|
43.5
|
%
|
|
$
|
123,344
|
|
|
31.1
|
%
|
|
$
|
124,699
|
|
|
44.9
|
%
|
Northeast - US
|
109,899
|
|
|
26.6
|
|
|
106,506
|
|
|
36.7
|
|
|
92,570
|
|
|
23.4
|
|
|
91,012
|
|
|
32.8
|
|
||||
West - US
|
124,991
|
|
|
30.2
|
|
|
32,976
|
|
|
11.4
|
|
|
120,788
|
|
|
30.4
|
|
|
33,097
|
|
|
11.9
|
|
||||
Midwest - US
|
53,626
|
|
|
13.0
|
|
|
20,431
|
|
|
7.0
|
|
|
60,095
|
|
|
15.1
|
|
|
24,621
|
|
|
8.9
|
|
||||
Canada
|
—
|
|
|
—
|
|
|
3,939
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
4,070
|
|
|
1.5
|
|
||||
Total
|
$
|
413,311
|
|
|
100.0
|
%
|
|
$
|
289,975
|
|
|
100.0
|
%
|
|
$
|
396,797
|
|
|
100.0
|
%
|
|
$
|
277,499
|
|
|
100.0
|
%
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
Up to $4,000
|
$
|
24,785
|
|
|
6.4
|
%
|
|
$
|
28,403
|
|
|
10.9
|
%
|
|
$
|
25,117
|
|
|
6.9
|
%
|
|
$
|
24,745
|
|
|
10.1
|
%
|
$4,001 to $7,000
|
66,756
|
|
|
17.5
|
|
|
53,271
|
|
|
20.5
|
|
|
60,151
|
|
|
16.5
|
|
|
45,765
|
|
|
18.6
|
|
||||
$7,001 to $10,000
|
92,389
|
|
|
24.2
|
|
|
84,596
|
|
|
32.7
|
|
|
92,687
|
|
|
25.5
|
|
|
84,026
|
|
|
34.1
|
|
||||
$10,001 to $13,000
|
44,527
|
|
|
11.7
|
|
|
37,706
|
|
|
14.6
|
|
|
34,032
|
|
|
9.4
|
|
|
38,033
|
|
|
15.4
|
|
||||
Greater than $13,000
|
153,628
|
|
|
40.2
|
|
|
55,075
|
|
|
21.3
|
|
|
151,570
|
|
|
41.7
|
|
|
53,741
|
|
|
21.8
|
|
||||
Total
|
$
|
382,085
|
|
|
100.0
|
%
|
|
$
|
259,051
|
|
|
100.0
|
%
|
|
$
|
363,557
|
|
|
100.0
|
%
|
|
$
|
246,310
|
|
|
100.0
|
%
|
|
|
December 31,
|
||||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||||
Weighted Average Yield - Performing Debt Investments
(1)
|
|
Senior Secured Debt
|
|
SubordinatedDebt
|
|
Total Debt
|
|
Senior Secured Debt
|
|
SubordinatedDebt
|
|
Total Debt
|
||||||
Less than 8%
|
|
0.7
|
%
|
|
—
|
%
|
|
0.7
|
%
|
|
2.0
|
%
|
|
—
|
%
|
|
1.6
|
%
|
8% – 10%
|
|
22.5
|
|
|
—
|
|
|
19.8
|
|
|
26.7
|
|
|
—
|
|
|
21.1
|
|
10% – 12%
|
|
42.9
|
|
|
26.9
|
|
|
41.0
|
|
|
38.4
|
|
|
11.5
|
|
|
32.7
|
|
12% – 14%
|
|
29.5
|
|
|
56.5
|
|
|
32.7
|
|
|
10.1
|
|
|
50.8
|
|
|
18.6
|
|
Greater than 14%
|
|
4.4
|
|
|
16.6
|
|
|
5.8
|
|
|
22.8
|
|
|
37.7
|
|
|
26.0
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Weighted average yield – performing debt investments
(1)
|
|
11.33
|
%
|
|
12.74
|
%
|
|
11.50
|
%
|
|
11.76
|
%
|
|
13.40
|
%
|
|
12.11
|
%
|
Weighted average yield – total debt investments
(2)
|
|
11.33
|
%
|
|
9.93
|
%
|
|
11.12
|
%
|
|
11.76
|
%
|
|
11.05
|
%
|
|
11.59
|
%
|
(2)
|
The weighted average yield on our total debt investments is computed as (a) the annual stated accruing interest plus the annualized accretion of Net Loan Fees divided by (b) amortized cost of our debt investments, including debt investments in non-accrual status as of the balance sheet date.
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||||||
|
Debt
Investments
|
|
Equity
Investments
|
|
Debt
Investments
|
|
Equity
Investments
|
||||||||
Investments in new portfolio companies
|
$
|
196.4
|
|
|
$
|
4.7
|
|
|
$
|
114.5
|
|
|
$
|
4.4
|
|
Investments in existing portfolio companies:
|
|
|
|
|
|
|
|
|
|||||||
Follow-on investments
|
63.6
|
|
|
1.3
|
|
|
19.0
|
|
|
1.4
|
|
||||
Delayed draw funding
|
6.2
|
|
|
—
|
|
|
3.6
|
|
|
—
|
|
||||
Total investments in existing portfolio companies
|
69.8
|
|
|
1.3
|
|
|
22.6
|
|
|
1.4
|
|
||||
Total investments in new and existing portfolio companies
|
$
|
266.2
|
|
|
$
|
6.0
|
|
|
$
|
137.1
|
|
|
$
|
5.8
|
|
Number of new portfolio company investments
|
28
|
|
|
4
|
|
|
17
|
|
|
4
|
|
||||
Number of existing portfolio company investments
|
20
|
|
|
4
|
|
|
17
|
|
|
2
|
|
||||
Proceeds/distributions from principal payments/equity investments
|
$
|
100.7
|
|
|
$
|
—
|
|
|
$
|
105.1
|
|
|
$
|
—
|
|
Proceeds from investments sold or redeemed
|
39.1
|
|
|
8.3
|
|
|
17.8
|
|
|
19.2
|
|
||||
Total proceeds from principal payments, equity distributions and investments sold
|
$
|
139.8
|
|
|
$
|
8.3
|
|
|
$
|
122.9
|
|
|
$
|
19.2
|
|
|
|
As of December 31,
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
Risk Category
|
|
Debt
Investments, at
Fair Value
|
|
% of Debt
Investments
|
|
Debt
Investments, at
Fair Value
|
|
% of Debt
Investments
|
||||||
1 (Low Risk)
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
2 (Below Average Risk)
|
|
3,788
|
|
|
1.0
|
|
|
3,755
|
|
|
1.5
|
|
||
3 (Average)
|
|
329,635
|
|
|
90.7
|
|
|
222,027
|
|
|
90.1
|
|
||
4 (Special Mention)
|
|
29,284
|
|
|
8.1
|
|
|
16,454
|
|
|
6.7
|
|
||
5 (Substandard)
|
|
—
|
|
|
—
|
|
|
2,873
|
|
|
1.2
|
|
||
6 (Doubtful)
|
|
850
|
|
|
0.2
|
|
|
1,201
|
|
|
0.5
|
|
||
7 (Loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
$
|
363,557
|
|
|
100.0
|
%
|
|
$
|
246,310
|
|
|
100.0
|
%
|
•
|
the cost of calculating our net asset value, including the cost of any third-party valuation services;
|
•
|
the cost of effecting sales and repurchases of shares of our common stock and other securities;
|
•
|
fees payable to third parties relating to making investments, including out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments;
|
•
|
transfer agent and custodial fees;
|
•
|
out-of-pocket fees and expenses associated with marketing efforts;
|
•
|
federal and state registration fees and any stock exchange listing fees;
|
•
|
U.S. federal, state and local taxes;
|
•
|
independent directors’ fees and expenses;
|
•
|
brokerage commissions;
|
•
|
fidelity bond, directors’ and officers’ liability insurance and other insurance premiums;
|
•
|
direct costs, such as printing, mailing and long-distance telephone;
|
•
|
fees and expenses associated with independent audits and outside legal costs;
|
•
|
costs associated with our reporting and compliance obligations under the 1940 Act and other applicable U.S. federal and state securities laws;
and
|
•
|
other expenses incurred by either OFS Services or us in connection with administering our business.
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Investment income
|
|
|
|
|
|
|
|
|
|||
Interest income:
|
|
|
|
|
|
|
|
|
|||
Cash interest income
|
$
|
36,068
|
|
|
$
|
26,444
|
|
|
$
|
24,901
|
|
Net Loan Fee amortization
|
2,288
|
|
|
1,450
|
|
|
1,414
|
|
|||
Other interest income
|
251
|
|
|
230
|
|
|
85
|
|
|||
Total interest income
|
38,607
|
|
|
28,124
|
|
|
26,400
|
|
|||
PIK income:
|
|
|
|
|
|
||||||
PIK interest income
|
1,193
|
|
|
1,508
|
|
|
1,194
|
|
|||
Preferred equity PIK dividends
|
906
|
|
|
1,399
|
|
|
1,433
|
|
|||
Total PIK income
|
2,099
|
|
|
2,907
|
|
|
2,627
|
|
|||
Dividend income:
|
|
|
|
|
|
|
|
|
|||
Preferred equity cash dividends
|
—
|
|
|
165
|
|
|
168
|
|
|||
Common equity dividends
|
315
|
|
|
317
|
|
|
307
|
|
|||
Total dividend income
|
315
|
|
|
482
|
|
|
475
|
|
|||
Fee income:
|
|
|
|
|
|
|
|
||||
Management, valuation, and syndication
|
922
|
|
|
163
|
|
|
159
|
|
|||
Prepayment, structuring, and other fees
|
891
|
|
|
1,750
|
|
|
1,433
|
|
|||
Total fee income
|
1,813
|
|
|
1,913
|
|
|
1,592
|
|
|||
Total investment income
|
42,834
|
|
|
33,426
|
|
|
31,094
|
|
|||
Total expenses, net
|
24,449
|
|
|
17,549
|
|
|
16,949
|
|
|||
Net investment income
|
18,385
|
|
|
15,877
|
|
|
14,145
|
|
|||
Net loss on investments
|
(8,813
|
)
|
|
(7,967
|
)
|
|
(317
|
)
|
|||
Net increase in net assets resulting from operations
|
$
|
9,572
|
|
|
$
|
7,910
|
|
|
$
|
13,828
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Interest and PIK interest income:
|
|
|
|
|
|
||||||
Senior secured debt investments
|
$
|
32,127
|
|
|
$
|
21,785
|
|
|
$
|
19,485
|
|
Subordinated debt investments
|
7,673
|
|
|
7,847
|
|
|
8,109
|
|
|||
Total interest and PIK interest income
|
$
|
39,800
|
|
|
$
|
29,632
|
|
|
$
|
27,594
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Amounts in thousands)
|
||||||||||
Interest expense
|
$
|
9,232
|
|
|
$
|
5,813
|
|
|
$
|
5,302
|
|
Management fees
|
6,335
|
|
|
4,999
|
|
|
4,516
|
|
|||
Incentive fee, net of waiver
|
4,387
|
|
|
2,962
|
|
|
3,333
|
|
|||
Professional fees
|
1,245
|
|
|
1,115
|
|
|
1,200
|
|
|||
Administration fee
|
1,601
|
|
|
1,314
|
|
|
1,304
|
|
|||
General and administrative expenses
|
1,649
|
|
|
1,346
|
|
|
1,294
|
|
|||
Total expenses
|
$
|
24,449
|
|
|
$
|
17,549
|
|
|
$
|
16,949
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Amounts in thousands)
|
||||||||||
Senior secured debt
|
$
|
(9,020
|
)
|
|
$
|
(4,441
|
)
|
|
$
|
411,000
|
|
Subordinated debt
|
(3,308
|
)
|
|
(8,667
|
)
|
|
(2,368
|
)
|
|||
Preferred equity
|
(1,993
|
)
|
|
5,373
|
|
|
(2,584,000
|
)
|
|||
Common equity and warrants
|
5,508
|
|
|
(232
|
)
|
|
4,224
|
|
|||
Net loss on investments
|
$
|
(8,813
|
)
|
|
$
|
(7,967
|
)
|
|
$
|
(317,000
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash from net investment income
|
$
|
18,782
|
|
|
$
|
11,451
|
|
|
$
|
10,051
|
|
Cash received from net realized gains (losses)
|
402
|
|
|
11,017
|
|
|
2,228
|
|
|||
Net (purchases and originations) repayments of portfolio investments
|
(120,272
|
)
|
|
(11,795
|
)
|
|
(23,595
|
)
|
|||
Net cash provided by (used in) operating activities
|
(101,088
|
)
|
|
10,673
|
|
|
(11,316
|
)
|
|||
Proceeds from common stock offering, net of expenses
|
—
|
|
|
53,423
|
|
|
—
|
|
|||
Proceeds from issuance of the Unsecured Notes, net of discounts
|
95,446
|
|
|
—
|
|
|
—
|
|
|||
Distributions paid to stockholders
|
(22,895
|
)
|
|
(16,700
|
)
|
|
(13,062
|
)
|
|||
Net borrowings (repayments) under revolving line of credit
|
(5,600
|
)
|
|
8,100
|
|
|
9,500
|
|
|||
Payment of debt issuance costs
|
(643
|
)
|
|
(203
|
)
|
|
(177
|
)
|
|||
Net Increase (decrease) in cash and cash equivalents
|
$
|
(34,780
|
)
|
|
$
|
55,293
|
|
|
$
|
(15,055
|
)
|
|
Maximum Availability
|
|
Floor Rate
|
|
Interest Rate
|
|
Unused Fee
|
|
Maturity Date
|
||||
PWB Credit Facility
|
$
|
50,000
|
|
|
5.25
|
%
|
|
Prime + 0.75%
|
|
0.50
|
%
|
|
January 31, 2020
|
Unsecured Notes
|
Principal
|
|
Stated Interest Rate
(1)
|
|
Effective Interest Rate
(2)
|
|
Maturity
(3)
|
|
2018 Interest Expense
(4)
|
||||||
Unsecured Notes Due April 2025
|
$
|
50,000
|
|
|
6.375
|
%
|
|
6.875
|
%
|
|
4/30/2025
|
|
$
|
2,439
|
|
Unsecured Notes Due October 2025
|
48,525
|
|
|
6.50
|
%
|
|
7.01
|
%
|
|
10/31/2025
|
|
697
|
|
||
Total
|
$
|
98,525
|
|
|
|
|
|
|
|
|
|
|
$
|
3,136
|
|
(1)
|
The weighted-average fixed cash interest rate on the Unsecured Notes as of December 31, 2018 was
6.44%
.
|
(2)
|
The effective interest rate on the Unsecured Notes includes deferred debt issuance cost amortization.
|
(3)
|
The Unsecured Notes Due April 2025 may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after April 30, 2020. The Unsecured Notes Due October 2025 may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after October 31, 2020.
|
(4)
|
Interest expense includes deferred issuance costs amortization of $228 for the year ended December 31, 2018.
|
Year ended
|
|
Average Dollar Borrowings
|
|
Average Interest Rate
|
|||
December 31, 2018
|
|
$
|
206,936
|
|
|
4.37
|
%
|
December 31, 2017
|
|
158,368
|
|
|
3.55
|
|
|
December 31, 2016
|
|
150,458
|
|
|
3.44
|
|
|
Principal and Interest Payments due by period
(2)
|
||||||||||||||||||
Contractual Obligations
(1)
|
Total
|
|
Less than 1
year
|
|
1-3 years
|
|
3-5 years
|
|
After
5 years
|
||||||||||
PWB Credit Facility
(3)
|
$
|
12,812
|
|
|
$
|
750
|
|
|
$
|
12,062
|
|
|
$
|
—
|
|
|
$
|
—
|
|
SBA Debentures
|
178,862
|
|
|
4,761
|
|
|
9,535
|
|
|
30,095
|
|
|
134,471
|
|
|||||
Unsecured Notes
|
127,584
|
|
|
6,342
|
|
|
6,342
|
|
|
6,342
|
|
|
108,558
|
|
|||||
Total
|
$
|
319,258
|
|
|
$
|
11,853
|
|
|
$
|
27,939
|
|
|
$
|
36,437
|
|
|
$
|
243,029
|
|
(1)
|
Excludes commitments to extend credit to our portfolio companies.
|
(2)
|
The PWB Credit Facility is scheduled to mature on January 31, 2020. The SBA debentures are scheduled to mature between September 2022 and 2025. The Unsecured Notes are scheduled to mature between April 2025 and October 2025.
|
(3)
|
Contractual interest is based on LIBOR at December 31, 2018 and assumes no interim additional borrowings or repayments under the revolving line of credit between December 31, 2018 and maturity.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Basis point increase
|
|
Interest income
|
|
Interest expense
|
|
Net increase
(decrease) |
||||||
50
|
|
$
|
1,929
|
|
|
$
|
61
|
|
|
$
|
1,868
|
|
100
|
|
3,557
|
|
|
122
|
|
|
3,435
|
|
|||
150
|
|
5,185
|
|
|
183
|
|
|
5,002
|
|
|||
200
|
|
6,813
|
|
|
243
|
|
|
6,570
|
|
|||
250
|
|
8,441
|
|
|
304
|
|
|
8,137
|
|
Basis point decrease
|
|
Interest income
|
|
Interest expense
(1)
|
|
Net increase
(decrease) |
||||||
50
|
|
$
|
(1,327
|
)
|
|
$
|
(61
|
)
|
|
$
|
(1,266
|
)
|
100
|
|
(2,947
|
)
|
|
(122
|
)
|
|
(2,825
|
)
|
|||
150
|
|
(4,518
|
)
|
|
|
|
|
(4,518
|
)
|
|||
200
|
|
(5,241
|
)
|
|
—
|
|
|
(5,241
|
)
|
|||
250
|
|
(5,479
|
)
|
|
—
|
|
|
(5,479
|
)
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
|
|
||
Investments, at fair value
|
|
|
|
|
|
||
Non-control/non-affiliate investments (amortized cost of $312,223 and $209,360, respectively)
|
$
|
297,749
|
|
|
$
|
197,374
|
|
Affiliate investments (amortized cost of $90,751 and $70,402, respectively)
|
89,103
|
|
|
69,557
|
|
||
Control investment (amortized cost of $10,337 and $10,213, respectively)
|
9,945
|
|
|
10,568
|
|
||
Total investments at fair value (amortized cost of $413,311 and $289,975, respectively)
|
396,797
|
|
|
277,499
|
|
||
Cash and cash equivalents
|
38,172
|
|
|
72,952
|
|
||
Interest receivable
|
2,787
|
|
|
2,734
|
|
||
Prepaid expenses and other assets
|
3,665
|
|
|
4,593
|
|
||
Total assets
|
$
|
441,421
|
|
|
$
|
357,778
|
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
|
||
Revolving line of credit
|
$
|
12,000
|
|
|
$
|
17,600
|
|
SBA debentures (net of deferred debt issuance costs of $2,280 and 2,657, respectively)
|
147,600
|
|
|
147,223
|
|
||
Unsecured notes (net of discounts and deferred debt issuance costs of $3,299 and $0, respectively)
|
95,226
|
|
|
—
|
|
||
Interest payable
|
2,791
|
|
|
1,596
|
|
||
Payable to investment adviser and affiliates
|
3,700
|
|
|
2,463
|
|
||
Payable for investments purchased
|
4,151
|
|
|
—
|
|
||
Accrued professional fees
|
637
|
|
|
433
|
|
||
Other liabilities
|
293
|
|
|
127
|
|
||
Total liabilities
|
$
|
266,398
|
|
|
$
|
169,442
|
|
|
|
|
|
|
|
||
Commitments and contingencies (Note 6)
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Net Assets
|
|
|
|
|
|
||
Preferred stock, par value of $0.01 per share, 2,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, par value of $0.01 per share, 100,000,000 shares authorized, 13,357,337 and 13,340,217 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively
|
134
|
|
|
133
|
|
||
Paid-in capital in excess of par
|
187,540
|
|
|
187,398
|
|
||
Total distributable earning (accumulated loss)
|
(12,651
|
)
|
|
805
|
|
||
Total net assets
|
$
|
175,023
|
|
|
$
|
188,336
|
|
|
|
|
|
|
|
||
Total liabilities and net assets
|
$
|
441,421
|
|
|
$
|
357,778
|
|
|
|
|
|
|
|
||
Number of shares outstanding
|
13,357,337
|
|
|
13,340,217
|
|
||
Net asset value per share
|
$
|
13.10
|
|
|
$
|
14.12
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Investment income
|
|
|
|
|
|
|
|
|
|||
Interest income:
|
|
|
|
|
|
|
|
|
|||
Non-control/non-affiliate investments
|
$
|
27,547
|
|
|
$
|
20,078
|
|
|
$
|
17,076
|
|
Affiliate investments
|
10,055
|
|
|
6,506
|
|
|
7,451
|
|
|||
Control investment
|
1,005
|
|
|
1,540
|
|
|
1,873
|
|
|||
Total interest income
|
38,607
|
|
|
28,124
|
|
|
26,400
|
|
|||
Payment-in-kind interest and dividend income:
|
|
|
|
|
|
|
|
|
|||
Non-control/non-affiliate investments
|
668
|
|
|
1,400
|
|
|
1,070
|
|
|||
Affiliate investments
|
1,321
|
|
|
1,375
|
|
|
1,437
|
|
|||
Control investment
|
110
|
|
|
132
|
|
|
120
|
|
|||
Total payment-in-kind interest and dividend income:
|
2,099
|
|
|
2,907
|
|
|
2,627
|
|
|||
Dividend income:
|
|
|
|
|
|
|
|
||||
Non-control/non-affiliate investments
|
—
|
|
|
50
|
|
|
36
|
|
|||
Affiliate investments
|
130
|
|
|
140
|
|
|
170
|
|
|||
Control investment
|
185
|
|
|
292
|
|
|
269
|
|
|||
Total dividend income
|
315
|
|
|
482
|
|
|
475
|
|
|||
Fee income:
|
|
|
|
|
|
|
|
||||
Non-control/non-affiliate investments
|
987
|
|
|
1,086
|
|
|
1,366
|
|
|||
Affiliate investments
|
760
|
|
|
675
|
|
|
110
|
|
|||
Control investment
|
66
|
|
|
152
|
|
|
116
|
|
|||
Total fee income
|
1,813
|
|
|
1,913
|
|
|
1,592
|
|
|||
Total investment income
|
42,834
|
|
|
33,426
|
|
|
31,094
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|||
Interest and financing expense
|
9,232
|
|
|
5,813
|
|
|
5,302
|
|
|||
Management fees
|
6,335
|
|
|
4,999
|
|
|
4,516
|
|
|||
Incentive fee
|
4,409
|
|
|
2,962
|
|
|
3,333
|
|
|||
Professional fees
|
1,245
|
|
|
1,115
|
|
|
1,200
|
|
|||
Administration fee
|
1,601
|
|
|
1,314
|
|
|
1,304
|
|
|||
Other Expenses
|
1,649
|
|
|
1,346
|
|
|
1,294
|
|
|||
Total expenses before incentive fee waiver
|
24,471
|
|
|
17,549
|
|
|
16,949
|
|
|||
Incentive fee waiver (see Note 3)
|
(22
|
)
|
|
—
|
|
|
—
|
|
|||
Total expenses, net of incentive fee waiver
|
24,449
|
|
|
17,549
|
|
|
16,949
|
|
|||
Net investment income
|
18,385
|
|
|
15,877
|
|
|
14,145
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Net realized and unrealized gain (loss) on investments
|
|
|
|
|
|
|
|
|
|||
Net realized gain (loss) on non-control/non-affiliate investments
|
(4,966
|
)
|
|
(3,248
|
)
|
|
2,387
|
|
|||
Net realized gain on affiliate investments
|
187
|
|
|
10,081
|
|
|
17
|
|
|||
Net unrealized depreciation on non-control/non-affiliate investments
|
(2,484
|
)
|
|
(9,715
|
)
|
|
(6,699
|
)
|
|||
Net unrealized appreciation (depreciation) on affiliate investments
|
(803
|
)
|
|
(5,088
|
)
|
|
3,341
|
|
|||
Net unrealized appreciation (depreciation) on control investments
|
(747
|
)
|
|
3
|
|
|
637
|
|
|||
Net loss on investments
|
(8,813
|
)
|
|
(7,967
|
)
|
|
(317
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||
Net increase in net assets resulting from operations
|
$
|
9,572
|
|
|
$
|
7,910
|
|
|
$
|
13,828
|
|
|
|
|
|
|
|
|
|
|
|||
Net investment income per common share - basic and diluted
|
$
|
1.38
|
|
|
$
|
1.28
|
|
|
$
|
1.46
|
|
Net increase in net assets resulting from operations per common share - basic and diluted
|
$
|
0.72
|
|
|
$
|
0.64
|
|
|
$
|
1.43
|
|
Distributions declared per common share
|
$
|
1.73
|
|
|
$
|
1.36
|
|
|
$
|
1.36
|
|
Basic and diluted weighted average shares outstanding
|
13,348,203
|
|
|
12,403,706
|
|
|
9,692,634
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Common Stock
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
133
|
|
|
$
|
97
|
|
|
$
|
96
|
|
Common stock issued from reinvestment of stockholder distributions, net of repurchase
|
1
|
|
|
36
|
|
|
1
|
|
|||
Balance at December 31
|
134
|
|
|
133
|
|
|
97
|
|
|||
|
|
|
|
|
|
||||||
Paid-in capital in excess of par
|
|
|
|
|
|
||||||
Balance at beginning of year
|
187,398
|
|
|
134,300
|
|
|
134,446
|
|
|||
Common stock issued from reinvestment of stockholder distributions, net of repurchase
|
204
|
|
|
53,507
|
|
|
120
|
|
|||
Return of capital distributions
|
—
|
|
|
—
|
|
|
(858
|
)
|
|||
Tax reclassifications of permanent differences
|
(62
|
)
|
|
(409
|
)
|
|
592
|
|
|||
Balance at December 31
|
187,540
|
|
|
187,398
|
|
|
134,300
|
|
|||
|
|
|
|
|
|
||||||
Total distributable earnings (accumulated losses)
|
|
|
|
|
|
||||||
Net investment income
|
18,385
|
|
|
15,877
|
|
|
14,145
|
|
|||
Realized net gains (losses) on investments
|
(4,779
|
)
|
|
6,833
|
|
|
2,404
|
|
|||
Unrealized depreciation net of taxes
|
(4,034
|
)
|
|
(14,800
|
)
|
|
(2,721
|
)
|
|||
Net increase in net assets resulting from operations
|
9,572
|
|
|
7,910
|
|
|
13,828
|
|
|||
Balance at beginning of year
|
805
|
|
|
9,381
|
|
|
8,471
|
|
|||
Distributions to stockholders
|
(23,090
|
)
|
|
(16,895
|
)
|
|
(12,326
|
)
|
|||
Tax reclassifications of net assets in accordance with GAAP
|
62
|
|
|
409
|
|
|
(592
|
)
|
|||
Balance at December 31
|
(12,651
|
)
|
|
805
|
|
|
9,381
|
|
|||
|
|
|
|
|
|
||||||
Total net assets at December 31
|
$
|
175,023
|
|
|
$
|
188,336
|
|
|
$
|
143,778
|
|
|
|
|
|
|
|
||||||
Shares outstanding
|
|
|
|
|
|
||||||
Balance at beginning of year
|
13,340,217
|
|
|
9,700,297
|
|
|
9,691,170
|
|
|||
Public offering of common stock
|
—
|
|
|
3,625,000
|
|
|
—
|
|
|||
Common stock issued from reinvestment of stockholder distributions
|
17,420
|
|
|
14,920
|
|
|
9,127
|
|
|||
Repurchase of common stock
|
(300
|
)
|
|
—
|
|
|
—
|
|
|||
Number of shares outstanding at December 31
|
13,357,337
|
|
|
13,340,217
|
|
|
9,700,297
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net increase in net assets resulting from operations
|
$
|
9,572
|
|
|
$
|
7,910
|
|
|
$
|
13,828
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Net realized (gain) loss on investments
|
4,779
|
|
|
(6,833
|
)
|
|
(2,404
|
)
|
|||
Net change in unrealized depreciation on investments
|
4,034
|
|
|
14,800
|
|
|
2,721
|
|
|||
Amortization of net loan fees
|
(2,288
|
)
|
|
(1,450
|
)
|
|
(1,414
|
)
|
|||
Amendment fees collected
|
161
|
|
|
175
|
|
|
261
|
|
|||
Payment-in-kind interest and dividend income
|
(2,099
|
)
|
|
(2,907
|
)
|
|
(2,627
|
)
|
|||
Amortization and write-off of debt issuance costs
|
781
|
|
|
553
|
|
|
490
|
|
|||
Amortization of intangible asset
|
195
|
|
|
195
|
|
|
195
|
|
|||
Purchase and origination of portfolio investments
|
(272,155
|
)
|
|
(142,900
|
)
|
|
(68,237
|
)
|
|||
Proceeds from principal payments on portfolio investments
|
100,699
|
|
|
105,078
|
|
|
41,404
|
|
|||
Proceeds from sale or redemption of portfolio investments
|
47,435
|
|
|
37,044
|
|
|
5,274
|
|
|||
Distributions received from portfolio investments
|
—
|
|
|
—
|
|
|
192
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Interest receivable
|
(53
|
)
|
|
(964
|
)
|
|
(937
|
)
|
|||
Interest payable
|
1,195
|
|
|
(3
|
)
|
|
51
|
|
|||
Payable to investment adviser and affiliates
|
1,237
|
|
|
(91
|
)
|
|
(172
|
)
|
|||
Other assets and liabilities
|
5,419
|
|
|
66
|
|
|
59
|
|
|||
Net cash provided by (used in) operating activities
|
(101,088
|
)
|
|
10,673
|
|
|
(11,316
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from common stock offering, net of expenses
|
—
|
|
|
53,423
|
|
|
—
|
|
|||
Payment of common stock offering costs
|
—
|
|
|
(72
|
)
|
|
—
|
|
|||
Proceeds from unsecured notes offerings, net of discounts
|
95,446
|
|
|
—
|
|
|
—
|
|
|||
Distributions paid to stockholders
|
(22,895
|
)
|
|
(16,700
|
)
|
|
(13,062
|
)
|
|||
Borrowings under revolving line of credit
|
96,500
|
|
|
44,700
|
|
|
9,500
|
|
|||
Repayments under revolving line of credit
|
(102,100
|
)
|
|
(36,600
|
)
|
|
—
|
|
|||
Payment of debt issuance costs
|
(643
|
)
|
|
(131
|
)
|
|
(177
|
)
|
|||
Net cash provided by (used in) financing activities
|
66,308
|
|
|
44,620
|
|
|
(3,739
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(34,780
|
)
|
|
55,293
|
|
|
(15,055
|
)
|
|||
Cash and cash equivalents — beginning of year
|
72,952
|
|
|
17,659
|
|
|
32,714
|
|
|||
Cash and cash equivalents — end of year
|
$
|
38,172
|
|
|
$
|
72,952
|
|
|
$
|
17,659
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
||||||
Cash paid during the period for interest
|
$
|
7,256
|
|
|
$
|
5,263
|
|
|
$
|
4,762
|
|
Reinvestment of stockholder distributions
|
195
|
|
|
196
|
|
|
122
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
BayMark Health Services
|
|
Outpatient Mental Health and Substance Abuse Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.60%
|
|
(L +8.25%)
|
|
3/22/2018
|
|
3/1/2025
|
|
$
|
4,000
|
|
|
$
|
3,964
|
|
|
$
|
3,933
|
|
|
2.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Brookfield WEC Holdings Inc.,
|
|
Business to Business Electronic Markets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.27%
|
|
(L +6.75%)
|
|
12/6/2018
|
|
8/3/2026
|
|
1,959
|
|
|
1,959
|
|
|
1,914
|
|
|
1.1
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Carolina Lubes, Inc. (4)
|
|
Automotive Oil Change and Lubrication Shops
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (8)
|
|
|
|
10.24%
|
|
(L +7.82%)
|
|
8/23/2017
|
|
8/23/2022
|
|
20,840
|
|
|
20,705
|
|
|
20,839
|
|
|
11.9
|
|
|||
Senior Secured Loan (Revolver) (7)
|
|
|
|
9.65%
|
|
(L +7.25%)
|
|
8/23/2017
|
|
8/23/2022
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
20,840
|
|
|
20,694
|
|
|
20,839
|
|
|
11.9
|
|
|||
Cirrus Medical Staffing, Inc. (4)
|
|
Temporary Help Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.05%
|
|
(L +8.25%)
|
|
3/5/2018
|
|
10/19/2022
|
|
12,926
|
|
|
12,779
|
|
|
12,732
|
|
|
7.3
|
|
|||
Senior Secured Loan (Revolver) (7)
|
|
|
|
11.05%
|
|
(L +8.25%)
|
|
3/5/2018
|
|
10/19/2022
|
|
1,280
|
|
|
1,280
|
|
|
1,261
|
|
|
0.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
14,206
|
|
|
14,059
|
|
|
13,993
|
|
|
8.0
|
|
|||
Community Intervention Services, Inc. (4) (6) (10) (11)
|
|
Outpatient Mental Health and Substance Abuse Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
7.0% cash / 6.0% PIK
|
|
N/A
|
|
7/16/2015
|
|
1/16/2021
|
|
9,060
|
|
|
7,639
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Confie Seguros Holdings II Co.
|
|
Insurance Agencies and Brokerages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.24%
|
|
(L +8.50%)
|
|
7/7/2015
|
|
11/1/2025
|
|
9,678
|
|
|
9,489
|
|
|
9,290
|
|
|
5.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Constellis Holdings, LLC
|
|
Other Justice, Public Order, and Safety Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.52%
|
|
(L +9.00%)
|
|
4/28/2017
|
|
4/21/2025
|
|
9,950
|
|
|
9,832
|
|
|
9,437
|
|
|
5.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Convergint Technologies
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.27%
|
|
(L +6.75%)
|
|
9/28/2018
|
|
2/2/2026
|
|
3,481
|
|
|
3,422
|
|
|
3,327
|
|
|
1.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
Davis Vision, Inc.
|
|
Direct Health and Medical Insurance Carriers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.28%
|
|
(L +6.75%)
|
|
7/17/2018
|
|
12/1/2025
|
|
$
|
5,854
|
|
|
$
|
5,700
|
|
|
$
|
5,570
|
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
DuPage Medical Group
|
|
Offices of Physicians, Mental Health Specialists
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.50%
|
|
(L +7.00%)
|
|
8/22/2017
|
|
8/15/2025
|
|
10,098
|
|
|
10,185
|
|
|
9,771
|
|
|
5.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Eblens Holdings, Inc.
|
|
Shoe Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (11)
|
|
|
|
12.0% cash / 1.00% PIK
|
|
N/A
|
|
7/13/2017
|
|
1/13/2023
|
|
8,920
|
|
|
8,855
|
|
|
8,821
|
|
|
5
|
|
|||
Common Equity (71,250 Class A units) (10)
|
|
|
|
|
|
|
|
7/13/2017
|
|
|
|
|
|
713
|
|
|
722
|
|
|
0.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
8,920
|
|
|
9,568
|
|
|
9,543
|
|
|
5.4
|
|
|||
Elgin Fasteners Group
|
|
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.30%
|
|
(L +6.50%)
|
|
10/31/2011
|
|
8/27/18 (5)
|
|
3,645
|
|
|
3,645
|
|
|
3,509
|
|
|
2.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Envocore Holding, LLC (FKA LRI Holding, LLC) (4)
|
|
Electrical Contractors and Other Wiring Installation Contractors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.05%
|
|
(L +9.25%)
|
|
6/30/2017
|
|
6/30/2022
|
|
17,344
|
|
|
17,212
|
|
|
16,821
|
|
|
9.6
|
|
|||
Preferred Equity (238,095 Series B units) (10)
|
|
|
|
|
|
|
|
6/30/2017
|
|
|
|
|
|
300
|
|
|
300
|
|
|
0.2
|
|
||||
Preferred Equity (13,315 Series C units) (10)
|
|
|
|
|
|
|
|
8/13/2018
|
|
|
|
|
|
13
|
|
|
13
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
17,344
|
|
|
17,525
|
|
|
17,134
|
|
|
9.8
|
|
|||
Excelin Home Health, LLC
|
|
Home Health Care Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.31%
|
|
(L +9.50%)
|
|
10/25/2018
|
|
4/25/2024
|
|
4,250
|
|
|
4,168
|
|
|
4,168
|
|
|
2.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
GGC Aerospace Topco L.P.
|
|
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.49%
|
|
(L +8.75%)
|
|
12/29/2017
|
|
9/8/2024
|
|
5,000
|
|
|
4,894
|
|
|
4,033
|
|
|
2.3
|
|
|||
Common Equity (368,852 Class A units) (10)
|
|
|
|
|
|
|
|
12/29/2017
|
|
|
|
|
|
450
|
|
|
104
|
|
|
0.1
|
|
||||
Common Equity (40,984 Class B units) (10)
|
|
|
|
|
|
|
|
12/29/2017
|
|
|
|
|
|
50
|
|
|
4
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
5,394
|
|
|
4,141
|
|
|
2.4
|
|
|||
GOBP Holdings, Inc.,
|
|
Supermarkets and Other Grocery (except Convenience) Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.05%
|
|
(L +7.25%)
|
|
10/17/2018
|
|
10/22/2026
|
|
1,400
|
|
|
1,386
|
|
|
1,349
|
|
|
0.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
Hyland Software, Inc.
|
|
Software Publishers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
6.02%
|
|
(L +3.50%)
|
|
10/24/2018
|
|
7/1/2024
|
|
$
|
173
|
|
|
$
|
173
|
|
|
$
|
166
|
|
|
0.1
|
%
|
Senior Secured Loan
|
|
|
|
9.52%
|
|
(L +7.00%)
|
|
10/24/2018
|
|
7/7/2025
|
|
2,601
|
|
|
2,620
|
|
|
2,534
|
|
|
1.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
2,774
|
|
|
2,793
|
|
|
2,700
|
|
|
1.5
|
|
|||
Inergex Holdings
|
|
Other Computer Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.39%
|
|
(L +7.00%)
|
|
10/1/2018
|
|
10/1/2024
|
|
13,092
|
|
|
12,904
|
|
|
12,904
|
|
|
7.4
|
|
|||
Senior Secured Loan (Revolver) (7)
|
|
|
|
0.50%
|
|
|
|
10/1/2018
|
|
10/1/2024
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
13,092
|
|
|
12,877
|
|
|
12,904
|
|
|
7.4
|
|
|||
JBR Clinical Research, Inc. (4) (8)
|
|
Research and Development in the Social Sciences and Humanities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.10%
|
|
(L +6.71%)
|
|
8/2/2018
|
|
8/2/2023
|
|
29,943
|
|
|
29,693
|
|
|
29,016
|
|
|
16.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
MAI Holdings, Inc. (4)
|
|
Printing Machinery and Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.50%
|
|
N/A
|
|
6/21/2018
|
|
6/1/2023
|
|
5,000
|
|
|
5,000
|
|
|
4,841
|
|
|
2.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
My Alarm Center, LLC (4) (10) (13)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,485 Class A units), 8% PIK
|
|
|
|
|
|
|
|
7/14/2017
|
|
|
|
|
|
1,571
|
|
|
1,536
|
|
|
0.9
|
|
||||
Preferred Equity (1,198 Class B units)
|
|
|
|
|
|
|
|
7/14/2017
|
|
|
|
|
|
1,198
|
|
|
—
|
|
|
—
|
|
||||
Preferred Equity (335 Class Z units) 25% PIK
|
|
|
|
|
|
|
|
9/12/2018
|
|
|
|
|
|
325
|
|
|
1,038
|
|
|
0.6
|
|
||||
Common Equity (64,149 units)
|
|
|
|
|
|
|
|
7/14/2017
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,094
|
|
|
2,574
|
|
|
1.5
|
|
||||
Online Tech Stores, LLC (4)
|
|
Stationery and Office Supplies Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50% cash / 1.0% PIK
|
|
N/A
|
|
2/1/2018
|
|
8/1/2023
|
|
16,150
|
|
|
15,882
|
|
|
15,785
|
|
|
8.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
OnSite Care, PLLC (4) (8)
|
|
Home Health Care Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.22%
|
|
(L +7.85%)
|
|
8/10/2018
|
|
8/10/2023
|
|
7,100
|
|
|
7,035
|
|
|
7,008
|
|
|
4.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Parfums Holding Company, Inc.
|
|
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.56%
|
|
(L +8.75%)
|
|
11/16/2017
|
|
6/30/2025
|
|
6,320
|
|
|
6,334
|
|
|
6,292
|
|
|
3.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
Pelican Products, Inc.
|
|
Unlaminated Plastics Profile Shape Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.13%
|
|
(L +7.75%)
|
|
9/24/2018
|
|
5/1/2026
|
|
$
|
6,055
|
|
|
$
|
6,060
|
|
|
$
|
5,901
|
|
|
3.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Performance Team LLC (4)
|
|
General Warehousing and Storage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.52%
|
|
(L +10.00%)
|
|
5/24/2018
|
|
11/24/2023
|
|
20,300
|
|
|
20,118
|
|
|
20,647
|
|
|
11.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PM Acquisition LLC
|
|
All Other General Merchandise Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.50% cash / 2.50% PIK
|
|
N/A
|
|
9/30/2017
|
|
10/29/2021
|
|
5,512
|
|
|
5,431
|
|
|
5,217
|
|
|
3.0
|
|
|||
Common Equity (499 units) (10) (13)
|
|
|
|
|
|
|
|
9/30/2017
|
|
|
|
|
|
499
|
|
|
137
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
5,512
|
|
|
5,930
|
|
|
5,354
|
|
|
3.1
|
|
|||
Resource Label Group, LLC
|
|
Commercial Printing (except Screen and Books)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.90%
|
|
(L +8.50%)
|
|
6/7/2017
|
|
11/26/2023
|
|
4,821
|
|
|
4,767
|
|
|
4,772
|
|
|
2.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Rocket Software, Inc.
|
|
Software Publishers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
6.77%
|
|
(L +4.25%)
|
|
11/20/2018
|
|
11/19/2025
|
|
670
|
|
|
667
|
|
|
645
|
|
|
0.4
|
|
|||
Senior Secured Loan
|
|
|
|
10.77%
|
|
(L +8.25%)
|
|
11/20/2018
|
|
11/19/2026
|
|
5,187
|
|
|
5,136
|
|
|
5,046
|
|
|
2.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
5,857
|
|
|
5,803
|
|
|
5,691
|
|
|
3.3
|
|
|||
RPLF Holdings, LLC (10) (13)
|
|
Software Publishers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Common Equity (254,110 Class A units)
|
|
|
|
|
|
|
|
1/17/2018
|
|
|
|
|
|
254
|
|
|
291
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sentry Centers Holdings, LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (14)
|
|
|
|
13.50%
|
|
(L +11.50%)
|
|
1/25/2016
|
|
7/24/2020
|
|
8,855
|
|
|
8,802
|
|
|
8,753
|
|
|
5.0
|
|
|||
Common Equity (5,000 Series C units) (10) (13)
|
|
|
|
|
|
|
|
3/31/2014
|
|
|
|
—
|
|
|
500
|
|
|
983
|
|
|
0.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
8,855
|
|
|
9,302
|
|
|
9,736
|
|
|
5.6
|
|
|||
Southern Technical Institute, LLC (4) (6) (10)
|
|
Colleges, Universities, and Professional Schools
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
6.00% PIK
|
|
N/A
|
|
6/27/2018
|
|
12/31/2021
|
|
1,517
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
|
|
|
|
|
|
6/27/2018
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
1,517
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
SSH Group Holdings, Inc.,
|
|
Child Day Care Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
6.77%
|
|
(L +4.25%)
|
|
7/26/2018
|
|
7/30/2025
|
|
$
|
982
|
|
|
$
|
979
|
|
|
$
|
920
|
|
|
0.5
|
%
|
Senior Secured Loan
|
|
|
|
10.77%
|
|
(L +8.25%)
|
|
7/26/2018
|
|
7/30/2026
|
|
7,216
|
|
|
7,147
|
|
|
6,839
|
|
|
3.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
8,198
|
|
|
8,126
|
|
|
7,759
|
|
|
4.4
|
|
|||
Stancor, L.P. (4) (10)
|
|
Pump and Pumping Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,250,000 Class A units), 8% PIK
|
|
|
|
|
|
|
|
8/19/2014
|
|
|
|
—
|
|
|
1,501
|
|
|
1,416
|
|
|
0.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
STS Operating, Inc.
|
|
Industrial Machinery and Equipment Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
6.77%
|
|
(L +4.25%)
|
|
5/16/2018
|
|
12/11/2024
|
|
638
|
|
|
637
|
|
|
602
|
|
|
0.3
|
|
|||
Senior Secured Loan
|
|
|
|
10.52%
|
|
(L +8.00%)
|
|
5/15/2018
|
|
4/30/2026
|
|
9,073
|
|
|
9,069
|
|
|
8,484
|
|
|
4.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
9,711
|
|
|
9,706
|
|
|
9,086
|
|
|
5.1
|
|
|||
The Escape Game, LLC (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
Other amusement and recreation industries
|
|
11.27%
|
|
(L +8.75%)
|
|
12/22/2017
|
|
12/22/2022
|
|
7,000
|
|
|
6,958
|
|
|
6,855
|
|
|
3.9
|
|
|||
Senior Secured Loan (Delayed Draw) (7)
|
|
|
|
11.22%
|
|
(L +8.75%)
|
|
7/20/2018
|
|
12/22/2022
|
|
3,733
|
|
|
3,733
|
|
|
3,656
|
|
|
2.1
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
10,733
|
|
|
10,691
|
|
|
10,511
|
|
|
6.0
|
|
|||
Truck Hero, Inc.
|
|
Truck Trailer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.76%
|
|
(L +8.25%)
|
|
5/30/2017
|
|
4/21/2025
|
|
7,014
|
|
|
6,977
|
|
|
6,808
|
|
|
3.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United Biologics Holdings, LLC (4) (10)
|
|
Medical Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (151,787 units)
|
|
|
|
|
|
|
|
7/26/2012
|
|
|
|
—
|
|
|
9
|
|
|
20
|
|
|
—
|
|
|||
Warrants (29,374 units)
|
|
|
|
|
|
|
|
7/26/2012
|
|
3/05/2022 (12)
|
|
—
|
|
|
82
|
|
|
25
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
91
|
|
|
45
|
|
|
—
|
|
|||
Wand Intermediate I LP
|
|
Automotive Body, Paint, and Interior Repair and Maintenance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.84%
|
|
(L +7.25%)
|
|
5/14/2018
|
|
9/19/2022
|
|
3,770
|
|
|
3,802
|
|
|
3,747
|
|
|
2.1
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
Wastebuilt Environmental Solutions, LLC.
|
|
Industrial Supplies Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.27%
|
|
(L +8.75%)
|
|
10/11/2018
|
|
10/11/2024
|
|
$
|
7,000
|
|
|
$
|
6,858
|
|
|
$
|
6,858
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
89
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
309,407
|
|
|
312,223
|
|
|
297,749
|
|
|
169.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
3rd Rock Gaming Holdings, LLC
|
|
Software Publishers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.30%
|
|
(L +7.50%)
|
|
3/13/2018
|
|
3/12/2023
|
|
21,626
|
|
|
21,353
|
|
|
20,023
|
|
|
11.4
|
|
|||
Common Equity (2,547,250 units) (10) (13)
|
|
|
|
|
|
|
|
3/13/2018
|
|
|
|
—
|
|
|
2,547
|
|
|
1,073
|
|
|
0.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
21,626
|
|
|
23,900
|
|
|
21,096
|
|
|
12.0
|
|
|||
Contract Datascan Holdings, Inc. (4)
|
|
Office Machinery and Equipment Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
11.50%
|
|
N/A
|
|
8/5/2015
|
|
2/5/2021
|
|
8,000
|
|
|
7,990
|
|
|
8,000
|
|
|
4.6
|
|
|||
Preferred Equity (3,061 Series A shares), 10% PIK
|
|
|
|
|
|
|
|
8/5/2015
|
|
|
|
—
|
|
|
4,944
|
|
|
6,652
|
|
|
3.8
|
|
|||
Common Equity (11,273 shares) (10)
|
|
|
|
|
|
|
|
6/28/2016
|
|
|
|
—
|
|
|
104
|
|
|
2,313
|
|
|
1.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
13,038
|
|
|
16,965
|
|
|
9.7
|
|
|||
DRS Imaging Services, LLC
|
|
Data Processing, Hosting, and Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (4) (8)
|
|
|
|
12.23%
|
|
(L +9.42%)
|
|
3/8/2018
|
|
11/20/2023
|
|
10,864
|
|
|
10,774
|
|
|
10,617
|
|
|
6.1
|
|
|||
Common Equity (1,135 units) (10) (13)
|
|
|
|
|
|
|
|
3/8/2018
|
|
|
|
—
|
|
|
1,135
|
|
|
1,197
|
|
|
0.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
10,864
|
|
|
11,909
|
|
|
11,814
|
|
|
6.8
|
|
|||
Master Cutlery, LLC (4) (6) (10)
|
|
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (11)
|
|
|
|
13.00% PIK
|
|
N/A
|
|
4/17/2015
|
|
4/17/2020
|
|
5,229
|
|
|
4,764
|
|
|
850
|
|
|
0.5
|
|
|||
Preferred Equity (3,723 Series A units), 8% PIK
|
|
|
|
|
|
|
|
4/17/2015
|
|
|
|
—
|
|
|
3,483
|
|
|
—
|
|
|
—
|
|
|||
Common Equity (15,564 units)
|
|
|
|
|
|
|
|
4/17/2015
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
5,229
|
|
|
8,247
|
|
|
850
|
|
|
0.5
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
NeoSystems Corp. (4) (10)
|
|
Other Accounting Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (521,962 convertible shares), 10% PIK
|
|
|
|
|
|
|
|
8/14/2014
|
|
|
|
$
|
—
|
|
|
$
|
1,537
|
|
|
$
|
2,250
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Pfanstiehl Holdings, Inc. (4)
|
|
Pharmaceutical Preparation Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50%
|
|
N/A
|
|
1/1/2014
|
|
9/29/2022
|
|
3,788
|
|
|
3,814
|
|
|
3,788
|
|
|
2.2
|
|
|||
Common Equity (400 Class A shares)
|
|
|
|
|
|
|
|
1/1/2014
|
|
|
|
—
|
|
|
217
|
|
|
8,360
|
|
|
4.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
3,788
|
|
|
4,031
|
|
|
12,148
|
|
|
7.0
|
|
|||
Professional Pipe Holdings, LLC
|
|
Plumbing, Heating, and Air-Conditioning Contractors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.77%
|
|
(L +10.25%)
|
|
3/23/2018
|
|
3/23/2023
|
|
7,779
|
|
|
7,647
|
|
|
7,466
|
|
|
4.3
|
|
|||
Common Equity (1,414 Class A units) (10)
|
|
|
|
|
|
|
|
3/23/2018
|
|
|
|
—
|
|
|
1,414
|
|
|
769
|
|
|
0.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
7,779
|
|
|
9,061
|
|
|
8,235
|
|
|
4.7
|
|
|||
TRS Services, LLC (4) (11)
|
|
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.27% cash / 1.0% PIK
|
|
(L +8.75%)
|
|
12/10/2014
|
|
12/10/2019
|
|
14,681
|
|
|
14,617
|
|
|
14,446
|
|
|
8.3
|
|
|||
Preferred Equity (329,266 Class AA units), 15% PIK
|
|
|
|
|
|
|
|
6/30/2016
|
|
|
|
—
|
|
|
465
|
|
|
473
|
|
|
0.3
|
|
|||
Preferred Equity (3,000,000 Class A units), 11% PIK (10)
|
|
|
|
|
|
|
|
12/10/2014
|
|
|
|
—
|
|
|
3,374
|
|
|
826
|
|
|
0.5
|
|
|||
Common Equity (3,000,000 units) (10)
|
|
|
|
|
|
|
|
12/10/2014
|
|
|
|
—
|
|
|
572
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
14,681
|
|
|
19,028
|
|
|
15,745
|
|
|
9.1
|
|
|||
Total Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
71,967
|
|
|
90,751
|
|
|
89,103
|
|
|
51.1
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Control Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
MTE Holding Corp. (4)
|
|
Travel Trailer and Camper Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (to Mirage Trailers, LLC, a controlled, consolidated subsidiary of MTE Holding Corp.)
|
|
|
|
14.00% cash / 1.50% PIK
|
|
(L +11.50%)
|
|
11/25/2015
|
|
11/25/2020
|
|
7,296
|
|
|
7,268
|
|
|
7,296
|
|
|
4.2
|
|
|||
Common Equity (554 shares)
|
|
|
|
|
|
|
|
11/25/2015
|
|
|
|
—
|
|
|
3,069
|
|
|
2,649
|
|
|
1.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
7,296
|
|
|
10,337
|
|
|
9,945
|
|
|
5.7
|
|
|||
Total Control Investment
|
|
|
|
|
|
|
|
|
|
|
|
7,296
|
|
|
10,337
|
|
|
9,945
|
|
|
5.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
|
|
|
|
|
$
|
388,670
|
|
|
$
|
413,311
|
|
|
$
|
396,797
|
|
|
226.7
|
%
|
(1)
|
Equity ownership may be held in shares or units of companies affiliated with the portfolio company. The Company's investments are generally classified as "restricted securities" as such term is defined under Regulation S-X Rule 6-03(f) or Securities Act Rule 144.
|
(2)
|
Substantially all of the investments that bear interest at a variable rate are indexed to LIBOR (L), and reset monthly, quarterly, or semi-annually. Variable-rate loans with an aggregate cost of
$316,260
include LIBOR reference rate floor provisions of generally 1% to 2%. At
December 31, 2018
, the reference rate on all such instruments was above the stated floors. For each investment, the Company has provided the spread over the reference rate and current interest rate in effect at
December 31, 2018
. Unless otherwise noted, all investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.
|
(3)
|
Fair value was determined using significant unobservable inputs for all of the Company's investments. See
Note 5
for further details.
|
(4)
|
Investments (or portion thereof) held by SBIC I LP. All other investments pledged as collateral under the PWB Credit Facility.
|
(5)
|
Elgin Fasteners Group became contractually due on August 27, 2018. The lending group entered into a forbearance agreement to extend the maturity through September 26, 2019. The investment shall continue to accrue interest as the borrower has continued to make interest and amortization payments.
|
(6)
|
Investment was on non-accrual status as of
December 31, 2018
, meaning the Company has ceased recognizing all or a portion of income on the investment. See
Note 5
for further details.
|
(7)
|
Subject to unfunded commitments. See Note 6 for further details.
|
(8)
|
The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its principal payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The table below provides additional details as of December 31, 2018:
|
Portfolio Company
|
Reported Interest Rate
|
|
Interest Rate per Credit Agreement
|
|
Additional Interest per Annum
|
Carolina Lubes, Inc.
|
10.24%
|
|
9.65%
|
|
0.59%
|
DRS Imaging Services, LLC
|
12.23%
|
|
10.80%
|
|
1.43%
|
JBR Clinical Research, Inc.
|
9.10%
|
|
8.64%
|
|
0.46%
|
OnSite Care, PLLC
|
10.22%
|
|
8.60%
|
|
1.62%
|
(9)
|
Reserved.
|
(10)
|
Non-income producing.
|
Portfolio Company
|
|
Investment Type
|
|
Range of PIK
Option
|
|
Range of Cash
Option
|
|
Maximum PIK
Rate Allowed
|
Community Intervention Services, Inc.
|
|
Subordinated Loan
|
|
0% or 6.00%
|
|
13.00% or 7.00%
|
|
6.00%
|
Eblens Holdings, Inc.
|
|
Subordinated Loan
|
|
0% or 1.00%
|
|
14.00% or 12.00%
|
|
1.50%
|
Master Cutlery, LLC
|
|
Senior Secured Loan
|
|
0% to 13.00%
|
|
13.00% to 0%
|
|
13.00%
|
TRS Services, LLC
|
|
Senior Secured Loan
|
|
0% or 1.00%
|
|
11.25% or 1.00%
|
|
1.00%
|
(12)
|
Represents expiration date of the warrants.
|
(13)
|
All or portion of investment held by a wholly-owned subsidiary subject to corporate income tax.
See
Note 8
for further details.
|
(14)
|
Maximum interest rate allowable under the terms of this investment is 13.50%
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aegis Acquisition, Inc.
|
|
Testing Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.17%
|
|
(L +8.50%)
|
|
10/31/2017
|
|
8/24/2021
|
|
$
|
3,520
|
|
|
$
|
3,470
|
|
|
$
|
3,439
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Armor Holdings II LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.70%
|
|
(L +9.00%)
|
|
7/20/2016
|
|
12/26/2020
|
|
3,500
|
|
|
3,476
|
|
|
3,570
|
|
|
1.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Avison Young Canada, Inc.
|
|
Offices of Real Estate Agents and Brokers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (5) (6)
|
|
|
|
9.50%
|
|
N/A
|
|
12/23/2016
|
|
12/15/2021
|
|
4,000
|
|
|
3,939
|
|
|
4,070
|
|
|
2.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
BJ's Wholesale Club, Inc.
|
|
Warehouse Clubs and Supercenters
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.95%
|
|
(L +7.50%)
|
|
5/9/2017
|
|
2/3/2025
|
|
9,268
|
|
|
9,158
|
|
|
9,063
|
|
|
4.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Carolina Lubes, Inc. (5) (9)
|
|
Automotive Oil Change and Lubrication Shops
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.28%
|
|
(L +7.25%)
|
|
8/23/2017
|
|
8/23/2022
|
|
21,411
|
|
|
21,236
|
|
|
21,430
|
|
|
11.4
|
|
|||
Senior Secured Loan (Revolver)
|
|
|
|
8.59%
|
|
(L +7.25%)
|
|
8/23/2017
|
|
8/23/2022
|
|
487
|
|
|
473
|
|
|
489
|
|
|
0.3
|
|
|||
Preferred Equity (973 units) 14% PIK
|
|
|
|
|
|
|
|
8/23/2017
|
|
|
|
|
|
3,039
|
|
|
3,065
|
|
|
1.6
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
21,898
|
|
|
24,748
|
|
|
24,984
|
|
|
13.3
|
|
|||
Community Intervention Services, Inc. (5)
|
|
Outpatient Mental Health and Substance Abuse Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (7) (11)
|
|
|
|
7.0% cash / 6.0% PIK
|
|
N/A
|
|
7/16/2015
|
|
1/16/2021
|
|
8,530
|
|
|
7,639
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Confie Seguros Holdings II Co.
|
|
Insurance Agencies and Brokerages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.98%
|
|
(L +9.50%)
|
|
7/7/2015
|
|
5/8/2019
|
|
9,678
|
|
|
9,579
|
|
|
9,417
|
|
|
5.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Constellis Holdings, LLC
|
|
Other Justice, Public Order, and Safety Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.69%
|
|
(L +9.00%)
|
|
4/28/2017
|
|
4/21/2025
|
|
9,950
|
|
|
9,813
|
|
|
9,919
|
|
|
5.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
DuPage Medical Group
|
|
Offices of Physicians, Mental Health Specialists
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.42%
|
|
(L +7.00%)
|
|
8/22/2017
|
|
8/15/2025
|
|
$
|
5,600
|
|
|
$
|
5,547
|
|
|
$
|
5,503
|
|
|
2.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Eblens Holdings, Inc.
|
|
Shoe Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
12.0% cash / 1.00% PIK
|
|
N/A
|
|
7/13/2017
|
|
1/13/2023
|
|
8,830
|
|
|
8,749
|
|
|
8,726
|
|
|
4.6
|
|
|||
Common Equity (71,250 Class A units)
|
|
|
|
|
|
|
|
7/13/2017
|
|
|
|
|
|
713
|
|
|
771
|
|
|
0.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
8,830
|
|
|
9,462
|
|
|
9,497
|
|
|
5.0
|
|
|||
Elgin Fasteners Group
|
|
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.44%
|
|
(L +6.75%)
|
|
10/31/2011
|
|
8/27/2018
|
|
3,888
|
|
|
3,873
|
|
|
3,544
|
|
|
1.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
GGC Aerospace Topco L.P.
|
|
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.23%
|
|
(L +8.75%)
|
|
12/29/2017
|
|
9/8/2024
|
|
5,000
|
|
|
4,875
|
|
|
4,875
|
|
|
2.6
|
|
|||
Common Equity (368,852 Class A units)
|
|
|
|
|
|
|
|
12/29/2017
|
|
|
|
|
|
450
|
|
|
450
|
|
|
0.2
|
|
||||
Common Equity (40,984 Class B units)
|
|
|
|
|
|
|
|
12/29/2017
|
|
|
|
|
|
50
|
|
|
50
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
5,375
|
|
|
5,375
|
|
|
2.8
|
|
|||
LRI Holding, LLC (5)
|
|
Electrical Contractors and Other Wiring Installation Contractors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.94%
|
|
(L +9.25%)
|
|
6/30/2017
|
|
6/30/2022
|
|
18,269
|
|
|
18,125
|
|
|
18,205
|
|
|
9.7
|
|
|||
Preferred Equity (238,095 Series B units)
|
|
|
|
|
|
|
|
6/30/2017
|
|
|
|
|
|
300
|
|
|
300
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
18,269
|
|
|
18,425
|
|
|
18,505
|
|
|
9.9
|
|
|||
Maverick Healthcare Equity, LLC (5)
|
|
Home Health Equipment Rental
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,250,000 units) (10)
|
|
|
|
|
|
|
|
12/10/2014
|
|
|
|
|
|
900
|
|
|
141
|
|
|
0.1
|
|
||||
Common Equity (1,250,000 Class A units) (10)
|
|
|
|
|
|
|
|
12/10/2014
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
141
|
|
|
0.1
|
|
||||
My Alarm Center, LLC (5)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,485 Class A units), 8% PIK (10) (13)
|
|
|
|
|
|
|
|
7/14/2017
|
|
|
|
|
|
1,540
|
|
|
1,540
|
|
|
0.8
|
|
||||
Preferred Equity (1,198 Class B units)
|
|
|
|
|
|
|
|
7/14/2017
|
|
|
|
|
|
1,198
|
|
|
1,198
|
|
|
0.6
|
|
||||
Common Equity (64,149 units) (13)
|
|
|
|
|
|
|
|
7/14/2017
|
|
|
|
|
|
—
|
|
|
43
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,738
|
|
|
2,781
|
|
|
1.4
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
NVA Holdings, Inc.
|
|
Veterinary Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.69%
|
|
(L +7.00%)
|
|
5/18/2016
|
|
8/14/2022
|
|
$
|
743
|
|
|
$
|
743
|
|
|
$
|
748
|
|
|
0.4
|
%
|
O2 Holdings, LLC (5)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
14.56%
|
|
(L +13.00%)
|
|
9/2/2016
|
|
9/2/2021
|
|
13,350
|
|
|
12,977
|
|
|
13,617
|
|
|
7.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Parfums Holding Company, Inc.
|
|
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.45%
|
|
(L +8.75%)
|
|
11/16/2017
|
|
6/30/2025
|
|
3,520
|
|
|
3,492
|
|
|
3,472
|
|
|
1.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Planet Fitness Midwest LLC (5)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
6/16/2016
|
|
12/16/2021
|
|
5,000
|
|
|
4,964
|
|
|
5,011
|
|
|
2.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PM Acquisition LLC
|
|
All Other General Merchandise Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.50% cash / 1.00% PIK
|
|
N/A
|
|
9/30/2017
|
|
10/29/2021
|
|
6,187
|
|
|
6,108
|
|
|
6,059
|
|
|
3.2
|
|
|||
Common equity (499 units) (10)
|
|
|
|
|
|
|
|
9/30/2017
|
|
|
|
|
|
499
|
|
|
278
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
6,187
|
|
|
6,607
|
|
|
6,337
|
|
|
3.3
|
|
|||
Resource Label Group, LLC
|
|
Commercial Printing (except Screen and Books)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.19%
|
|
(L +8.50%)
|
|
6/7/2017
|
|
11/26/2023
|
|
4,821
|
|
|
4,755
|
|
|
4,767
|
|
|
2.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Security Alarm Financing Enterprises, L.P. (5)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (14)
|
|
|
|
14.00% cash / 0.69% PIK
|
|
(L +13.00%)
|
|
10/14/2016
|
|
6/19/2020
|
|
12,525
|
|
|
12,441
|
|
|
12,364
|
|
|
6.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sentry Centers Holdings, LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
13.07%
|
|
(L +11.50%)
|
|
1/25/2016
|
|
7/24/2019
|
|
4,195
|
|
|
4,156
|
|
|
4,259
|
|
|
2.3
|
|
|||
Preferred Equity (5,000 Series C units), 8% PIK (10) (13)
|
|
|
|
|
|
|
|
3/31/2014
|
|
|
|
|
|
527
|
|
|
527
|
|
|
0.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
4,195
|
|
|
4,683
|
|
|
4,786
|
|
|
2.6
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Southern Technical Institute, LLC (5)
|
|
Colleges, Universities, and Professional Schools
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (10)
|
|
|
|
15.00% PIK
|
|
N/A
|
|
12/2/2014
|
|
12/2/2020
|
|
$
|
3,520
|
|
|
$
|
3,451
|
|
|
$
|
1,201
|
|
|
0.6
|
%
|
Preferred Equity (1,764,720 Class SP-1 units), 15.75% PIK (8) (10)
|
|
|
|
|
|
|
|
3/30/2016
|
|
|
|
|
|
2,094
|
|
|
—
|
|
|
—
|
|
||||
Warrants (2,174,905 Class A units) (10)
|
|
|
|
|
|
|
|
3/30/2016
|
|
3/30/2026 (12)
|
|
|
|
46
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
3,520
|
|
|
5,591
|
|
|
1,201
|
|
|
0.6
|
|
|||
Stancor, L.P. (5)
|
|
Pump and Pumping Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.56%
|
|
(L +8.00%)
|
|
8/19/2014
|
|
8/19/2019
|
|
7,919
|
|
|
7,896
|
|
|
7,919
|
|
|
4.2
|
|
|||
Preferred Equity (1,250,000 Class A units), 8% PIK (8) (10)
|
|
|
|
|
|
|
|
8/19/2014
|
|
|
|
|
|
1,501
|
|
|
1,486
|
|
|
0.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
7,919
|
|
|
9,397
|
|
|
9,405
|
|
|
5.0
|
|
|||
The Escape Game, LLC (5)
|
|
Other amusement and recreation industries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.32%
|
|
(L +8.75%)
|
|
12/22/2017
|
|
12/20/2022
|
|
7,000
|
|
|
6,948
|
|
|
6,948
|
|
|
3.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TravelCLICK, Inc.
|
|
Computer Systems Design and Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.32%
|
|
(L +7.75%)
|
|
10/16/2015
|
|
11/6/2021
|
|
7,334
|
|
|
7,303
|
|
|
7,334
|
|
|
3.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Truck Hero, Inc.
|
|
Truck Trailer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.89%
|
|
(L +8.25%)
|
|
5/30/2017
|
|
4/21/2025
|
|
7,014
|
|
|
6,971
|
|
|
7,064
|
|
|
3.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United Biologics Holdings, LLC (5)
|
|
Medical Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (11)
|
|
|
|
12.00% cash / 2.00% PIK
|
|
N/A
|
|
7/26/2012
|
|
4/30/2018
|
|
4,266
|
|
|
4,248
|
|
|
4,266
|
|
|
2.3
|
|
|||
Subordinated Loan (10)
|
|
|
|
8.00 % PIK
|
|
N/A
|
|
7/6/2016
|
|
4/30/2019
|
|
7
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|||
Preferred Equity (151,787 units) (10)
|
|
|
|
|
|
|
|
4/16/2013
|
|
|
|
|
|
9
|
|
|
92
|
|
|
—
|
|
||||
Warrants (29,374 units) (10)
|
|
|
|
|
|
|
|
7/26/2012
|
|
3/5/2022 (12)
|
|
|
|
82
|
|
|
147
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
4,273
|
|
|
4,346
|
|
|
4,512
|
|
|
2.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
199,332
|
|
|
209,360
|
|
|
197,374
|
|
|
104.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
All Metals Holding, LLC (5)
|
|
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.00% cash / 1.00% PIK
|
|
N/A
|
|
12/31/2014
|
|
12/28/2021
|
|
$
|
12,869
|
|
|
$
|
12,288
|
|
|
$
|
12,759
|
|
|
6.8
|
%
|
Common Equity (637,954 units) (10)
|
|
|
|
|
|
|
|
12/31/2014
|
|
|
|
|
|
565
|
|
|
1,785
|
|
|
0.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
12,869
|
|
|
12,853
|
|
|
14,544
|
|
|
7.7
|
|
|||
Contract Datascan Holdings, Inc. (5)
|
|
Office Machinery and Equipment Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
12.00%
|
|
N/A
|
|
8/5/2015
|
|
2/5/2021
|
|
8,000
|
|
|
7,985
|
|
|
8,000
|
|
|
4.2
|
|
|||
Preferred Equity (3,061 Series A shares), 10% PIK (10)
|
|
|
|
|
|
|
|
8/5/2015
|
|
|
|
|
|
4,347
|
|
|
5,964
|
|
|
3.2
|
|
||||
Common Equity (11,273 shares) (10)
|
|
|
|
|
|
|
|
6/28/2016
|
|
|
|
|
|
104
|
|
|
260
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
12,436
|
|
|
14,224
|
|
|
7.5
|
|
|||
Jobson Healthcare Information, LLC (5) (9)
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (11)
|
|
|
|
10.13% cash / 5.30% PIK
|
|
(L +13.43%)
|
|
7/23/2014
|
|
7/21/2019
|
|
15,447
|
|
|
15,241
|
|
|
12,910
|
|
|
6.9
|
|
|||
Common Equity (13 member units)
|
|
|
|
|
|
|
|
12/15/2017
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Warrants (1 member unit) (10)
|
|
|
|
|
|
|
|
7/23/2014
|
|
7/21/2019 (12)
|
|
|
|
454
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
15,447
|
|
|
15,695
|
|
|
12,910
|
|
|
6.9
|
|
|||
Master Cutlery, LLC (5)
|
|
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
4/17/2015
|
|
4/17/2020
|
|
4,705
|
|
|
4,692
|
|
|
2,873
|
|
|
1.5
|
|
|||
Preferred Equity (3,723 Series A units), 8% PIK (8) (10)
|
|
|
|
|
|
|
|
4/17/2015
|
|
|
|
|
|
3,483
|
|
|
—
|
|
|
—
|
|
||||
Common Equity (15,564 units) (10)
|
|
|
|
|
|
|
|
4/17/2015
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
4,705
|
|
|
8,175
|
|
|
2,873
|
|
|
1.5
|
|
|||
NeoSystems Corp.(5)
|
|
Other Accounting Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50% cash / 1.25% PIK
|
|
N/A
|
|
8/29/2014
|
|
8/13/2019
|
|
2,143
|
|
|
2,136
|
|
|
2,143
|
|
|
1.1
|
|
|||
Preferred Equity (521,962 convertible shares), 10% PIK (10)
|
|
|
|
|
|
|
|
8/14/2014
|
|
|
|
|
|
1,390
|
|
|
2,248
|
|
|
1.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
2,143
|
|
|
3,526
|
|
|
4,391
|
|
|
2.3
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Initial Acquisition Date
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Pfanstiehl Holdings, Inc. (5)
|
|
Pharmaceutical Preparation Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50%
|
|
N/A
|
|
1/1/2014
|
|
9/29/2021
|
|
$
|
3,788
|
|
|
$
|
3,823
|
|
|
$
|
3,755
|
|
|
2.0
|
%
|
Common Equity (400 Class A shares)
|
|
|
|
|
|
|
|
1/1/2014
|
|
|
|
|
|
217
|
|
|
4,755
|
|
|
2.5
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
3,788
|
|
|
4,040
|
|
|
8,510
|
|
|
4.5
|
|
|||
TRS Services, LLC (5)
|
|
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.07%
|
|
(L +8.50%)
|
|
12/10/2014
|
|
12/10/2019
|
|
9,466
|
|
|
9,330
|
|
|
9,466
|
|
|
5.0
|
|
|||
Preferred Equity (329,266 Class AA units), 15% PIK (10)
|
|
|
|
|
|
|
|
6/30/2016
|
|
|
|
|
|
401
|
|
|
409
|
|
|
0.2
|
|
||||
Preferred Equity (3,000,000 Class A units), 11% PIK (8) (10)
|
|
|
|
|
|
|
|
12/10/2014
|
|
|
|
|
|
3,374
|
|
|
2,230
|
|
|
1.2
|
|
||||
Common Equity (3,000,000 units) (10)
|
|
|
|
|
|
|
|
12/10/2014
|
|
|
|
|
|
572
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
9,466
|
|
|
13,677
|
|
|
12,105
|
|
|
6.4
|
|
|||
Total Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
56,418
|
|
|
70,402
|
|
|
69,557
|
|
|
36.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Control Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
MTE Holding Corp. (2) (5)
|
|
Travel Trailer and Camper Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (to Mirage Trailers, LLC, a controlled, consolidated subsidiary of MTE Holding Corp.)
|
|
|
|
13.07% cash / 1.50% PIK
|
|
(L +13.50%)
|
|
11/25/2015
|
|
11/25/2020
|
|
7,186
|
|
|
7,144
|
|
|
7,118
|
|
|
3.8
|
|
|||
Common Equity (554 shares)
|
|
|
|
|
|
|
|
11/25/2015
|
|
|
|
|
|
3,069
|
|
|
3,450
|
|
|
1.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
7,186
|
|
|
10,213
|
|
|
10,568
|
|
|
5.6
|
|
|||
Total Control Investment
|
|
|
|
|
|
|
|
|
|
|
|
7,186
|
|
|
10,213
|
|
|
10,568
|
|
|
5.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
|
|
|
|
|
$
|
262,936
|
|
|
$
|
289,975
|
|
|
$
|
277,499
|
|
|
147.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Equity ownership may be held in shares or units of companies affiliated with the portfolio company. The Company's investments are generally classified as "restricted securities" as such term is defined under Regulation S-X Rule 6-03(f) or Securities Act Rule 144.
|
(2)
|
Substantially all of the investments that bear interest at a variable rate are indexed to LIBOR (L), and reset monthly, quarterly, or semi-annually. Variable-rate loans with an aggregate cost of $189,022 include LIBOR reference rate floor provisions of generally 1% to 2%; at December 31, 2017, approximately 7% of the Company's LIBOR referenced amounts are subject to a reference rate floor of 2.00%. For each investment, the Company has provided the spread over the reference rate and current interest rate in effect at December 31, 2017. Unless otherwise noted, all investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.
|
(3)
|
Fair value was determined using significant unobservable inputs for all of the Company's investments. See Note 5 for further details.
|
(4)
|
The negative amount represents the excess of the par value of an unfunded commitment in excess of its fair value.
|
(5)
|
Investments (or portion thereof) held by SBIC I LP. All other investments pledged as collateral under the PWB Credit Facility.
|
(6)
|
Non-qualifying assets under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of the Company's assets, as defined under Section 55 of the 1940 Act, at the time of acquisition of any additional non-qualifying assets. As of December 31, 2017, 97.53% of the Company's assets were qualifying assets.
|
(7)
|
Investment was on non-accrual status as of December 31, 2017, meaning the Company has ceased recognizing all or a portion of income on the investment. See Note 4 for further details.
|
(8)
|
The fair value of the most-recently recognized PIK dividend as of December 31, 2017, was $0.
|
(9)
|
The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The reported interest rate of 9.28% at December 31, 2017, includes additional interest of 0.69% per annum as specified under the contractual arrangement among the Company and the co‑lenders.
|
(10)
|
Non-income producing.
|
Portfolio Company
|
|
Investment Type
|
|
Range of PIK
Option
|
|
Range of Cash
Option
|
|
Maximum PIK
Rate Allowed
|
|
Community Intervention Services, Inc.
|
|
Subordinated Loan
|
|
0% or 6.00%
|
|
13.00% or 7.00%
|
|
6.00
|
%
|
Eblens Holdings, Inc.
|
|
Subordinated Loan
|
|
0% or 1.00%
|
|
13.00% or 12.00%
|
|
1.00
|
%
|
Jobson Healthcare Information, LLC
|
|
Senior Secured Loan
|
|
1.50% to 5.30%
|
|
13.93% to 10.13%
|
|
5.30
|
%
|
United Biologics Holdings, LLC
|
|
Senior Secured Loan
|
|
0% or 2.00%
|
|
14.00% or 12.00%
|
|
2.00
|
%
|
(12)
|
Represents expiration date of the warrants.
|
(13)
|
All or portion of investment held by a wholly-owned subsidiary subject to income tax.
|
(14)
|
The PIK provision is reset at the beginning of each interest period equal to the excess of reference rate over the reference rate floor of 1.00%. The PIK interest rate in the schedule represents the current PIK interest rate in effect.
|
|
|
|
|
|
Standard
|
|
Description
|
|
Period of Adoption
|
|
Effect of Adoption on the Financial Statements
|
Standards that were adopted
|
|
|
|
|
|
|
ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
|
|
Eliminates, adds and modifies certain disclosure requirements for fair value measurements
|
|
Third Quarter 2018 prospectively
|
|
No material impact to the Company's consolidated financial statements.
|
ASU 2016-15, Statement of Cash Flows
|
|
Addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows.
|
|
First Quarter 2018 prospectively
|
|
No material impact to the Company's consolidated financial statements.
|
ASU 2016-19, Technical Corrections and Improvements
|
|
Makes minor corrections and clarifications that affect a wide variety of topics in the Accounting Standards Codification, including an amendment to Topic 820, Fair Value Measurement, which clarifies the difference between a valuation approach and a valuation technique when applying the guidance of that Topic. The amendment also requires an entity to disclose when there has been a change in either or both a valuation approach and/or a valuation technique. The transition guidance for the Topic 820 amendment must be applied prospectively because it could potentially involve the use of hindsight that includes fair value measurements.
|
|
First Quarter 2018 prospectively
|
|
No material impact to the Company's consolidated financial statements.
|
Standard
|
|
Description
|
|
Effect of Adoption on the Financial Statements
|
Standards that are not yet adopted
|
|
|
|
|
ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
|
Removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.
|
|
Annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early application is permitted. The adoption of ASU 2017-04 is not expected to have a material effect on the Company's consolidated financial statements.
|
|
Standard
|
|
Description
|
|
Effect of Adoption on the Financial Statements
|
Standards that are not yet adopted
|
|
|
|
|
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities
|
|
Shortens the amortization period for certain purchased callable debt securities held at a premium to the earliest call date. Securities held at a discount are to continue to be amortized to maturity.
|
|
Annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the ASU in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The adoption of ASU 2017-08 is not expected to have a material effect on the Company's consolidated financial statements.
|
|
December 31, 2017
|
||
Accumulated undistributed net investment income
|
$
|
9,404
|
|
Accumulated undistributed net realized gains
|
3,881
|
|
|
Net unrealized depreciation on investments
|
(12,480
|
)
|
|
Total distributable earnings
|
$
|
805
|
|
|
For the Year Ended December 31,
|
|||||
Distributions to stockholders
|
2017
|
2016
|
||||
Accumulated net investment income
|
$
|
14,158
|
|
$
|
12,157
|
|
Accumulated net realized gains
|
2,738
|
|
169
|
|
||
Total distributions from total distributable earnings (accumulated losses)
|
16,896
|
|
12,326
|
|
||
Return of capital distributions
|
—
|
|
858
|
|
||
Total distributions to stockholders
|
16,896
|
|
13,184
|
|
|
|
|
|
|
|
Percentage of Total
|
|
|
|
Percentage of Total
|
||||||||||||
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Senior secured debt investments
|
$
|
325,873
|
|
|
78.8
|
%
|
|
186.2
|
%
|
|
$
|
319,017
|
|
|
80.4
|
%
|
|
182.3
|
%
|
Subordinated debt investments
|
56,212
|
|
|
13.6
|
|
|
32.1
|
|
|
44,540
|
|
|
11.2
|
|
|
25.4
|
|
||
Preferred equity
|
19,620
|
|
|
4.7
|
|
|
11.2
|
|
|
14,613
|
|
|
3.7
|
|
|
8.4
|
|
||
Common equity and warrants
|
11,606
|
|
|
2.8
|
|
|
6.6
|
|
|
18,627
|
|
|
4.7
|
|
|
10.6
|
|
||
Total
|
$
|
413,311
|
|
|
100.0
|
%
|
|
236.1
|
%
|
|
$
|
396,797
|
|
|
100.0
|
%
|
|
226.7
|
%
|
|
|
|
|
Percentage of Total
|
|
|
|
Percentage of Total
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Administrative and Support and Waste Management and Remediation Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Security Systems Services (except Locksmiths)
|
|
$
|
6,516
|
|
|
1.6
|
%
|
|
3.7
|
%
|
|
$
|
5,901
|
|
|
1.5
|
%
|
|
3.4
|
%
|
Temporary Help Services
|
|
14,059
|
|
|
3.4
|
|
|
8.0
|
|
|
13,993
|
|
|
3.5
|
|
|
8.0
|
|
||
Arts, Entertainment, and Recreation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Amusement and Recreation Industries
|
|
10,691
|
|
|
2.6
|
|
|
6.1
|
|
|
10,511
|
|
|
2.6
|
|
|
6.0
|
|
||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Electrical Contractors and Other Wiring Installation Contractors
|
|
17,525
|
|
|
4.2
|
|
|
10.0
|
|
|
17,134
|
|
|
4.3
|
|
|
9.8
|
|
||
Plumbing, Heating, and Air-Conditioning Contractors
|
|
9,061
|
|
|
2.2
|
|
|
5.2
|
|
|
8,235
|
|
|
2.1
|
|
|
4.7
|
|
||
Education Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Colleges, Universities, and Professional Schools
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Finance and Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct Health and Medical Insurance Carriers
|
|
5,700
|
|
|
1.4
|
|
|
3.3
|
|
|
5,570
|
|
|
1.4
|
|
|
3.2
|
|
||
Insurance Agencies and Brokerages
|
|
9,489
|
|
|
2.3
|
|
|
5.4
|
|
|
9,290
|
|
|
2.3
|
|
|
5.3
|
|
|
|
|
|
|
Percentage of Total
|
|
|
|
Percentage of Total
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Health Care and Social Assistance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Child Day Care Services
|
|
8,126
|
|
|
2.0
|
|
|
4.6
|
|
|
7,759
|
|
|
2.0
|
|
|
4.4
|
|
||
Home Health Care Services
|
|
11,203
|
|
|
2.7
|
|
|
6.4
|
|
|
11,176
|
|
|
2.8
|
|
|
6.4
|
|
||
Medical Laboratories
|
|
91
|
|
|
—
|
|
|
0.1
|
|
|
45
|
|
|
—
|
|
|
—
|
|
||
Offices of Physicians, Mental Health Specialists
|
|
10,185
|
|
|
2.5
|
|
|
5.8
|
|
|
9,771
|
|
|
2.5
|
|
|
5.6
|
|
||
Outpatient Mental Health and Substance Abuse Centers
|
|
11,603
|
|
|
2.8
|
|
|
6.6
|
|
|
3,933
|
|
|
1.0
|
|
|
2.2
|
|
||
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Data Processing, Hosting, and Related Services
|
|
11,909
|
|
|
2.9
|
|
|
6.8
|
|
|
11,814
|
|
|
3.0
|
|
|
6.7
|
|
||
Software Publishers
|
|
32,750
|
|
|
7.9
|
|
|
18.6
|
|
|
29,778
|
|
|
7.5
|
|
|
16.9
|
|
||
Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
3,645
|
|
|
0.9
|
|
|
2.1
|
|
|
3,509
|
|
|
0.9
|
|
|
2.0
|
|
||
Commercial Printing (except Screen and Books)
|
|
4,767
|
|
|
1.2
|
|
|
2.7
|
|
|
4,772
|
|
|
1.2
|
|
|
2.7
|
|
||
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
5,394
|
|
|
1.3
|
|
|
3.1
|
|
|
4,141
|
|
|
1.0
|
|
|
2.4
|
|
||
Pharmaceutical Preparation Manufacturing
|
|
4,031
|
|
|
1.0
|
|
|
2.3
|
|
|
12,148
|
|
|
3.1
|
|
|
6.9
|
|
||
Printing Machinery and Equipment Manufacturing
|
|
5,000
|
|
|
1.2
|
|
|
2.9
|
|
|
4,841
|
|
|
1.2
|
|
|
2.8
|
|
||
Pump and Pumping Equipment Manufacturing
|
|
1,501
|
|
|
0.4
|
|
|
0.9
|
|
|
1,416
|
|
|
0.4
|
|
|
0.8
|
|
||
Travel Trailer and Camper Manufacturing
|
|
10,337
|
|
|
2.5
|
|
|
5.9
|
|
|
9,945
|
|
|
2.5
|
|
|
5.7
|
|
||
Truck Trailer Manufacturing
|
|
6,977
|
|
|
1.7
|
|
|
4.0
|
|
|
6,808
|
|
|
1.7
|
|
|
3.9
|
|
||
Unlaminated Plastics Profile Shape Manufacturing
|
|
6,060
|
|
|
1.5
|
|
|
3.5
|
|
|
5,901
|
|
|
1.5
|
|
|
3.4
|
|
||
Other Services (except Public Administration)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Automotive Body, Paint, and Interior Repair and Maintenance
|
|
3,802
|
|
|
0.9
|
|
|
2.2
|
|
|
3,747
|
|
|
0.9
|
|
|
2.1
|
|
||
Automotive Oil Change and Lubrication Shops
|
|
20,694
|
|
|
5.0
|
|
|
11.8
|
|
|
20,839
|
|
|
5.3
|
|
|
11.9
|
|
||
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
19,028
|
|
|
4.6
|
|
|
10.9
|
|
|
15,745
|
|
|
4.0
|
|
|
9.0
|
|
||
Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Other Accounting Services
|
|
1,537
|
|
|
0.4
|
|
|
0.9
|
|
|
2,250
|
|
|
0.6
|
|
|
1.3
|
|
||
Other Computer Related Services
|
|
12,877
|
|
|
3.1
|
|
|
7.4
|
|
|
12,904
|
|
|
3.3
|
|
|
7.4
|
|
||
Other Professional, Scientific, and Technical Services
|
|
9,302
|
|
|
2.3
|
|
|
5.3
|
|
|
9,736
|
|
|
2.5
|
|
|
5.6
|
|
||
Research and Development in the Social Sciences and Humanities
|
|
29,693
|
|
|
7.2
|
|
|
17.0
|
|
|
29,016
|
|
|
7.3
|
|
|
16.5
|
|
||
Public Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total
|
|
|
|
Percentage of Total
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Other Justice, Public Order, and Safety Activities
|
|
9,832
|
|
|
2.4
|
|
|
5.6
|
|
|
9,437
|
|
|
2.4
|
|
|
5.4
|
|
||
Real Estate and Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Home Health Equipment Rental
|
|
900
|
|
|
0.2
|
|
|
0.5
|
|
|
89
|
|
|
—
|
|
|
0.1
|
|
||
Office Machinery and Equipment Rental and Leasing
|
|
13,038
|
|
|
3.2
|
|
|
7.4
|
|
|
16,965
|
|
|
4.3
|
|
|
9.7
|
|
||
Retail Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
6,334
|
|
|
1.5
|
|
|
3.6
|
|
|
6,292
|
|
|
1.6
|
|
|
3.6
|
|
||
Shoe store
|
|
9,568
|
|
|
2.2
|
|
|
5.5
|
|
|
9,543
|
|
|
2.4
|
|
|
5.5
|
|
||
Supermarkets and Other Grocery (except Convenience) Stores
|
|
1,386
|
|
|
0.3
|
|
|
0.8
|
|
|
1,349
|
|
|
0.3
|
|
|
0.8
|
|
||
All Other General Merchandise Stores
|
|
5,930
|
|
|
1.4
|
|
|
3.4
|
|
|
5,354
|
|
|
1.2
|
|
|
3.1
|
|
||
Transportation and Warehousing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
General Warehousing and Storage
|
|
20,118
|
|
|
4.9
|
|
|
11.5
|
|
|
20,647
|
|
|
5.2
|
|
|
11.8
|
|
||
Wholesale Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Business to Business Electronic Markets
|
|
1,959
|
|
|
0.5
|
|
|
1.1
|
|
|
1,914
|
|
|
0.5
|
|
|
1.1
|
|
||
Industrial Machinery and Equipment Merchant Wholesalers
|
|
9,706
|
|
|
2.3
|
|
|
5.5
|
|
|
9,086
|
|
|
2.3
|
|
|
5.2
|
|
||
Industrial Supplies Merchant Wholesalers
|
|
6,858
|
|
|
1.7
|
|
|
3.9
|
|
|
6,858
|
|
|
1.7
|
|
|
3.9
|
|
||
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
8,247
|
|
|
2.0
|
|
|
4.7
|
|
|
850
|
|
|
0.2
|
|
|
0.5
|
|
||
Stationery and Office Supplies Merchant Wholesalers
|
|
15,882
|
|
|
3.7
|
|
|
9.1
|
|
|
15,785
|
|
|
4.0
|
|
|
9.0
|
|
||
|
|
$
|
413,311
|
|
|
100.0
|
%
|
|
236.1
|
%
|
|
$
|
396,797
|
|
|
100.0
|
%
|
|
226.7
|
%
|
|
|
|
Percentage of Total
|
|
|
|
Percentage of Total
|
||||||||||||
|
Amortized Cost
|
|
Amor-tized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Senior secured debt investments
|
$
|
196,020
|
|
|
67.6
|
%
|
|
104.1
|
%
|
|
$
|
195,112
|
|
|
70.3
|
%
|
|
103.5
|
%
|
Subordinated debt investments
|
63,031
|
|
|
21.7
|
%
|
|
33.5
|
|
|
51,198
|
|
|
18.4
|
%
|
|
27.2
|
|
||
Preferred equity
|
24,103
|
|
|
8.3
|
%
|
|
12.8
|
|
|
19,200
|
|
|
6.9
|
%
|
|
10.2
|
|
||
Common equity and warrants
|
6,821
|
|
|
2.4
|
%
|
|
3.6
|
|
|
11,989
|
|
|
4.3
|
%
|
|
6.4
|
|
||
Total
|
$
|
289,975
|
|
|
100.0
|
%
|
|
154.0
|
%
|
|
$
|
277,499
|
|
|
100.0
|
%
|
|
147.3
|
%
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Administrative and Support and Waste Management and Remediation Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Security Systems Services (except Locksmiths)
|
|
$
|
15,179
|
|
|
5.2
|
%
|
|
8.1
|
%
|
|
$
|
15,145
|
|
|
5.5
|
%
|
|
8.0
|
%
|
Arts, Entertainment, and Recreation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fitness and Recreational Sports Centers
|
|
17,941
|
|
|
6.2
|
|
|
9.5
|
|
|
18,628
|
|
|
6.7
|
|
|
9.9
|
|
||
Other Amusement and Recreation Industries
|
|
6,948
|
|
|
2.4
|
|
|
3.7
|
|
|
6,948
|
|
|
2.5
|
|
|
3.7
|
|
||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Electrical Contractors and Other Wiring Installation Contractors
|
|
18,425
|
|
|
6.4
|
|
|
9.8
|
|
|
18,505
|
|
|
6.7
|
|
|
9.8
|
|
||
Education Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Colleges, Universities, and Professional Schools
|
|
5,591
|
|
|
1.9
|
|
|
3.0
|
|
|
1,201
|
|
|
0.4
|
|
|
0.6
|
|
||
Finance and Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Insurance Agencies and Brokerages
|
|
9,579
|
|
|
3.3
|
|
|
5.1
|
|
|
9,417
|
|
|
3.4
|
|
|
5.0
|
|
||
Offices of Real Estate Agents and Brokers
|
|
3,939
|
|
|
1.4
|
|
|
2.1
|
|
|
4,070
|
|
|
1.5
|
|
|
2.2
|
|
||
Health Care and Social Assistance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Medical Laboratories
|
|
4,346
|
|
|
1.5
|
|
|
2.3
|
|
|
4,512
|
|
|
1.6
|
|
|
2.4
|
|
||
Offices of Physicians, Mental Health Specialists
|
|
5,547
|
|
|
1.9
|
|
|
2.9
|
|
|
5,503
|
|
|
2.0
|
|
|
2.9
|
|
||
Outpatient Mental Health and Substance Abuse Centers
|
|
7,639
|
|
|
2.6
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
3,873
|
|
|
1.3
|
|
|
2.1
|
|
|
3,544
|
|
|
1.3
|
|
|
1.9
|
|
||
Commercial Printing (except Screen and Books)
|
|
4,755
|
|
|
1.6
|
|
|
2.5
|
|
|
4,767
|
|
|
1.7
|
|
|
2.5
|
|
||
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
5,375
|
|
|
1.9
|
|
|
2.9
|
|
|
5,375
|
|
|
1.9
|
|
|
2.9
|
|
||
Pharmaceutical Preparation Manufacturing
|
|
4,040
|
|
|
1.4
|
|
|
2.1
|
|
|
8,510
|
|
|
3.1
|
|
|
4.5
|
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Pump and Pumping Equipment Manufacturing
|
|
9,397
|
|
|
3.2
|
|
|
5.0
|
|
|
9,405
|
|
|
3.4
|
|
|
5.0
|
|
||
Travel Trailer and Camper Manufacturing
|
|
10,213
|
|
|
3.5
|
|
|
5.5
|
|
|
10,568
|
|
|
3.7
|
|
|
5.5
|
|
||
Truck Trailer Manufacturing
|
|
6,971
|
|
|
2.4
|
|
|
3.8
|
|
|
7,064
|
|
|
2.5
|
|
|
3.7
|
|
||
Other Services (except Public Administration)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Automotive Oil Change and Lubrication Shops
|
|
24,748
|
|
|
8.5
|
|
|
13.0
|
|
|
24,984
|
|
|
9.0
|
|
|
13.5
|
|
||
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
13,677
|
|
|
4.8
|
|
|
7.3
|
|
|
12,105
|
|
|
4.4
|
|
|
6.4
|
|
||
Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Computer Systems Design and Related Services
|
|
7,303
|
|
|
2.5
|
|
|
3.9
|
|
|
7,334
|
|
|
2.6
|
|
|
3.9
|
|
||
Other Accounting Services
|
|
3,526
|
|
|
1.2
|
|
|
1.9
|
|
|
4,391
|
|
|
1.6
|
|
|
2.3
|
|
||
Other Professional, Scientific, and Technical Services
|
|
23,854
|
|
|
8.2
|
|
|
12.5
|
|
|
21,266
|
|
|
7.7
|
|
|
11.3
|
|
||
Testing Laboratories
|
|
3,470
|
|
|
1.2
|
|
|
1.8
|
|
|
3,439
|
|
|
1.2
|
|
|
1.8
|
|
||
Veterinary Services
|
|
743
|
|
|
0.3
|
|
|
0.4
|
|
|
748
|
|
|
0.3
|
|
|
0.4
|
|
||
Public Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Justice, Public Order, and Safety Activities
|
|
9,813
|
|
|
3.4
|
|
|
5.2
|
|
|
9,919
|
|
|
3.6
|
|
|
5.3
|
|
||
Real Estate and Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home Health Equipment Rental
|
|
900
|
|
|
0.3
|
|
|
0.5
|
|
|
141
|
|
|
0.1
|
|
|
0.1
|
|
||
Office Machinery and Equipment Rental and Leasing
|
|
12,436
|
|
|
4.3
|
|
|
6.6
|
|
|
14,224
|
|
|
5.1
|
|
|
7.6
|
|
||
Retail Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
3,492
|
|
|
1.2
|
|
|
1.9
|
|
|
3,472
|
|
|
1.3
|
|
|
1.8
|
|
||
Shoe store
|
|
9,462
|
|
|
3.3
|
|
|
5.0
|
|
|
9,497
|
|
|
3.4
|
|
|
5.0
|
|
||
Warehouse Clubs and Supercenters
|
|
9,158
|
|
|
3.2
|
|
|
4.9
|
|
|
9,063
|
|
|
3.3
|
|
|
4.8
|
|
||
All Other General Merchandise Stores
|
|
6,607
|
|
|
2.3
|
|
|
3.5
|
|
|
6,337
|
|
|
2.3
|
|
|
3.4
|
|
||
Wholesale Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
12,853
|
|
|
4.4
|
|
|
6.8
|
|
|
14,544
|
|
|
5.2
|
|
|
7.7
|
|
||
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
8,175
|
|
|
2.8
|
|
|
4.3
|
|
|
2,873
|
|
|
1.0
|
|
|
1.5
|
|
||
|
|
$
|
289,975
|
|
|
100.0
|
%
|
|
154.0
|
%
|
|
$
|
277,499
|
|
|
100.0
|
%
|
|
147.3
|
%
|
|
|
|
December 31
|
|||||
Balance Sheet:
|
|
2018
|
2017
|
||||
Current assets
|
|
$
|
5,900
|
|
$
|
7,161
|
|
Noncurrent assets
|
|
25,103
|
|
25,408
|
|
||
Total assets
|
|
$
|
31,003
|
|
$
|
32,569
|
|
Current liabilities
|
|
$
|
979
|
|
$
|
3,116
|
|
Noncurrent liabilities
|
|
19,886
|
|
17,276
|
|
||
Total liabilities
|
|
20,865
|
|
20,392
|
|
||
Non-controlling interest
|
|
4,526
|
|
5,675
|
|
||
Controlling interest
|
|
5,612
|
|
6,502
|
|
||
Total equity
|
|
$
|
10,138
|
|
$
|
12,177
|
|
|
|
Year Ended December 31
|
|||||||||
Summary of Operations:
|
|
2018
|
2017
|
|
2016
|
||||||
Net Sales
|
|
$
|
29,902
|
|
$
|
31,614
|
|
|
$
|
27,704
|
|
Gross Profit
|
|
3,216
|
|
9,857
|
|
|
7,436
|
|
|||
Net income (loss)
|
|
(597
|
)
|
2,106
|
|
|
2,232
|
|
|||
Net income (loss) attributable to MTE Holding Corp.
|
|
191
|
|
1,594
|
|
|
1,235
|
|
|
|
|
Fair Value at December 31, 2018
(1)
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
(Weighted average) |
||
Debt investments:
|
|
|
|
|
|
|
|
|
|
Senior secured
|
$
|
295,087
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
6.94% - 19.70% (12.49%)
|
|
|
|
|
|
|
|
|
|
|
Subordinated
|
36,394
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
7.16% - 15.40% (7.21%)
|
|
|
8,146
|
|
|
Market approach
|
|
EBITDA multiples
|
|
3.50x - 7.65x (5.10x)
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments
|
|
|
|
|
|
|
|
|
|
Preferred equity
|
12,039
|
|
|
Market approach
|
|
EBITDA multiples
|
|
4.50x - 8.50x (7.42x)
|
|
|
2,574
|
|
|
Market approach
|
|
Reoccurring Monthly Revenue
|
|
38.0x - 42.0x (40.0x)
|
|
Common equity and
warrants |
18,627
|
|
|
Market approach
|
|
EBITDA multiples
|
|
3.50x - 11.00x (8.68x)
|
(1)
|
Excludes
$23,930
,
$-0-
, and
$-0-
of senior secured debt investments, subordinated debt investments, and equity investments, respectively, valued at a Transaction Price.
|
|
Fair Value at December 31, 2017
(1)
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
(Weighted average) |
||
Debt investments:
|
|
|
|
|
|
|
|
||
Senior secured
|
$
|
152,231
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
10.01% - 16.50% (12.24%)
|
|
12,910
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
7.50x - 7.50x (7.50x)
|
|
|
9,063
|
|
|
Indicative Prices
|
|
Broker-dealers' quotes
|
|
N/A
|
|
|
|
|
|
|
|
|
|
||
Subordinated
|
47,117
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
11.24% - 16.90% (14.69%)
|
|
|
4,074
|
|
|
Market approach
|
|
EBITDA multiples
|
|
4.25x - 7.25x (6.37x)
|
|
|
|
|
|
|
|
|
|
||
Equity investments
|
|
|
|
|
|
|
|
||
Preferred equity
|
19,200
|
|
|
Market approach
|
|
EBITDA multiples
|
|
4.25x - 13.48x (7.80x)
|
|
Common equity and
warrants |
11,489
|
|
|
Market approach
|
|
EBITDA multiples
|
|
4.25x - 8.28x (6.27x)
|
(1)
|
Excludes $20,908, $7, and $500 of senior secured debt investments, subordinated debt investments, and equity investments, respectively, valued at a Transaction Price.
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Senior
Secured Debt
Investments
|
|
Subordinated
Debt
Investments
|
|
Preferred Equity
|
|
Common Equity and Warrants
|
|
Total
|
||||||||||
Level 3 assets, January 1, 2018
|
$
|
195,112
|
|
|
$
|
51,198
|
|
|
$
|
19,200
|
|
|
$
|
11,989
|
|
|
$
|
277,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net realized gain (loss) on investments
|
(3,076
|
)
|
|
(3,469
|
)
|
|
(1,889
|
)
|
|
3,655
|
|
|
(4,779
|
)
|
|||||
Net unrealized appreciation (depreciation) on investments
|
(5,944
|
)
|
|
161
|
|
|
(104
|
)
|
|
1,853
|
|
|
(4,034
|
)
|
|||||
Amortization of Net Loan Fees
|
2,076
|
|
|
212
|
|
|
—
|
|
|
—
|
|
|
2,288
|
|
|||||
Capitalized PIK interest and dividends
|
388
|
|
|
668
|
|
|
907
|
|
|
—
|
|
|
1,963
|
|
|||||
Amendment fees
|
(159
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(161
|
)
|
|||||
Purchase and origination of portfolio investments
|
245,278
|
|
|
20,930
|
|
|
338
|
|
|
5,609
|
|
|
272,155
|
|
|||||
Proceeds from principal payments on portfolio investments
|
(75,541
|
)
|
|
(25,158
|
)
|
|
—
|
|
|
—
|
|
|
(100,699
|
)
|
|||||
Sale and redemption of portfolio investments
|
(39,117
|
)
|
|
—
|
|
|
(3,339
|
)
|
|
(4,979
|
)
|
|
(47,435
|
)
|
|||||
Reclassification between preferred equity and common equity and warrants
|
—
|
|
|
—
|
|
|
(500
|
)
|
|
500
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Level 3 assets, December 31, 2018
|
$
|
319,017
|
|
|
$
|
44,540
|
|
|
$
|
14,613
|
|
|
$
|
18,627
|
|
|
$
|
396,797
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Senior
Secured Debt
Investments
|
|
Subordinated
Debt
Investments
|
|
Preferred Equity
|
|
Common Equity and Warrants
|
|
Total
|
||||||||||
Level 3 assets, January 1, 2017
|
$
|
180,955
|
|
|
$
|
63,410
|
|
|
$
|
23,721
|
|
|
$
|
13,541
|
|
|
$
|
281,627
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net realized gain on investments
|
(4,908
|
)
|
|
—
|
|
|
10,704
|
|
|
1,037
|
|
|
6,833
|
|
|||||
Net unrealized appreciation (depreciation) on investments
|
467
|
|
|
(8,667
|
)
|
|
(5,331
|
)
|
|
(1,265
|
)
|
|
(14,796
|
)
|
|||||
Amortization of Net Loan Fees
|
1,395
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
1,450
|
|
|||||
Capitalized PIK interest and dividends
|
1,042
|
|
|
466
|
|
|
1,399
|
|
|
—
|
|
|
2,907
|
|
|||||
Amendment fees
|
(280
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(280
|
)
|
|||||
Purchase and origination of portfolio investments
|
127,812
|
|
|
9,244
|
|
|
4,631
|
|
|
1,213
|
|
|
142,900
|
|
|||||
Proceeds from principal payments on portfolio investments
|
(82,137
|
)
|
|
(22,941
|
)
|
|
—
|
|
|
—
|
|
|
(105,078
|
)
|
|||||
Sale and redemption of portfolio investments
|
(17,858
|
)
|
|
—
|
|
|
(17,669
|
)
|
|
(2,537
|
)
|
|
(38,064
|
)
|
|||||
Conversion from debt investment to equity investment (Note 4)
|
(1,745
|
)
|
|
—
|
|
|
1,745
|
|
|
—
|
|
|
—
|
|
|||||
Conversion from subordinated to senior secured debt investment (Note 4)
|
(9,631
|
)
|
|
9,631
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Level 3 assets, December 31, 2017
|
$
|
195,112
|
|
|
$
|
51,198
|
|
|
$
|
19,200
|
|
|
$
|
11,989
|
|
|
$
|
277,499
|
|
|
|
Year Ended December 31,
|
|||||
|
2018
|
2017
|
||||
Senior secured debt investments
|
$
|
(6,738
|
)
|
$
|
1,013
|
|
Subordinated debt investments
|
138
|
|
(8,681
|
)
|
||
Preferred equity
|
(2,172
|
)
|
(767
|
)
|
||
Common equity and warrants
|
2,573
|
|
(2,061
|
)
|
||
Net unrealized depreciation on investments held
|
$
|
(6,199
|
)
|
$
|
(10,496
|
)
|
|
December 31, 2018
|
||||||||||||||
Description
|
Level 1
|
|
Level 2
|
|
Level 3
(1)
|
|
Total
|
||||||||
OFS Capital Corporation 6.375% Notes due 2025
|
$
|
48,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48,500
|
|
OFS Capital Corporation 6.5% Notes due 2025
|
46,603
|
|
|
—
|
|
|
—
|
|
|
46,603
|
|
||||
SBA-guaranteed debentures
|
—
|
|
|
—
|
|
|
147,956
|
|
|
147,956
|
|
||||
Total debt, at fair value
|
$
|
95,103
|
|
|
$
|
—
|
|
|
$
|
147,956
|
|
|
$
|
243,059
|
|
|
December 31, 2017
|
||||||||||||||
Description
|
Level 1
|
|
Level 2
|
|
Level 3
(1)
|
|
Total
|
||||||||
SBA-guaranteed debentures
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
155,510
|
|
|
$
|
155,510
|
|
Total debt, at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
155,510
|
|
|
$
|
155,510
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||
Description
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
OFS Capital Corporation 6.375% Notes due 2025
|
$
|
48,377
|
|
|
$
|
48,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
OFS Capital Corporation 6.5% Notes due 2025
|
46,849
|
|
|
46,603
|
|
|
—
|
|
|
—
|
|
||||
SBA-guaranteed debentures
|
147,600
|
|
|
147,956
|
|
|
147,223
|
|
|
155,510
|
|
||||
Total debt, at fair value
|
$
|
242,826
|
|
|
$
|
243,059
|
|
|
$
|
147,223
|
|
|
$
|
155,510
|
|
|
Name of Portfolio Company
|
|
Investment Type
|
|
Amount
|
||
Carolina Lubes, Inc.
|
|
Senior Secured Loan (Revolver)
|
|
$
|
2,920
|
|
Cirrus Medical Staffing, Inc.
|
|
Senior Secured Loan (Revolver)
|
|
128
|
|
|
Inergex Holdings
|
|
Senior Secured Loan (Revolver)
|
|
1,875
|
|
|
The Escape Game, LLC
|
|
Senior Secured Loan (Delayed Draw)
|
|
3,267
|
|
|
|
|
|
|
$
|
8,190
|
|
|
|
|
|
|
Fixed Interest Rate
|
|
SBA debentures outstanding
|
|||||||
Pooling Date
|
|
Maturity Date
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||
September 19, 2012
|
|
September 1, 2022
|
|
3.049
|
%
|
|
$
|
14,000
|
|
|
$
|
14,000
|
|
September 25, 2013
|
|
September 1, 2023
|
|
4.448
|
|
|
7,000
|
|
|
7,000
|
|
||
March 26, 2014
|
|
March 1, 2024
|
|
3.995
|
|
|
5,000
|
|
|
5,000
|
|
||
September 24, 2014
|
|
September 1, 2024
|
|
3.819
|
|
|
4,110
|
|
|
4,110
|
|
||
September 24, 2014
|
|
September 1, 2024
|
|
3.370
|
|
|
31,265
|
|
|
31,265
|
|
||
March 25, 2015
|
|
March 1, 2025
|
|
2.872
|
|
|
65,920
|
|
|
65,920
|
|
||
September 23, 2015
|
|
September 1, 2025
|
|
3.184
|
|
|
22,585
|
|
|
22,585
|
|
||
SBA debentures outstanding
|
|
|
|
|
|
149,880
|
|
|
149,880
|
|
|||
Unamortized debt issuance costs
|
|
|
|
|
|
(2,280
|
)
|
|
(2,657
|
)
|
|||
SBA debentures outstanding, net of unamortized debt issuance costs
|
|
|
|
$
|
147,600
|
|
|
$
|
147,223
|
|
|
Unsecured Notes
|
Principal
|
|
Unamor-tized Discount and Issuance Costs
|
|
Stated Interest Rate
(1)
|
|
Effec-tive Interest Rate
(2)
|
|
Maturity
(3)
|
|
2018 Interest Expense
(4)
|
||||||||
Unsecured Notes Due April 2025
|
$
|
50,000
|
|
|
$
|
1,623
|
|
|
6.375
|
%
|
|
6.875
|
%
|
|
4/30/2025
|
|
$
|
2,439
|
|
Unsecured Notes Due October 2025
|
48,525
|
|
|
1,676
|
|
|
6.500
|
%
|
|
7.007
|
%
|
|
10/31/2025
|
|
697
|
|
|||
Total
|
$
|
98,525
|
|
|
$
|
3,299
|
|
|
|
|
|
|
|
|
|
|
$
|
3,136
|
|
Year ended
|
|
Average Dollar Borrowings
|
|
Average Interest Rate
|
|||
December 31, 2018
|
|
$
|
206,936
|
|
|
4.37
|
%
|
December 31, 2017
|
|
158,368
|
|
|
3.55
|
|
|
December 31, 2016
|
|
150,458
|
|
|
3.44
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Ordinary taxable income
|
$
|
18,053
|
|
|
$
|
14,158
|
|
|
$
|
12,157
|
|
Long-term capital gain
|
5,036
|
|
|
2,738
|
|
|
169
|
|
|||
Return of capital
|
—
|
|
|
—
|
|
|
858
|
|
|||
Total distributions to stockholders
|
$
|
23,089
|
|
|
$
|
16,896
|
|
|
$
|
13,184
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Ordinary income
|
$
|
3,712
|
|
|
$
|
—
|
|
Net long-term capital gains (capital loss carryforward – non-expiring)
|
(5,176
|
)
|
|
4,936
|
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Tax-basis amortized cost of investments
|
$
|
408,715
|
|
|
$
|
282,401
|
|
Tax-basis gross unrealized appreciation on investments
|
18,426
|
|
|
16,207
|
|
||
Tax-basis gross unrealized depreciation on investments
|
(30,344
|
)
|
|
(21,109
|
)
|
||
Tax-basis net unrealized appreciation (depreciation) on investments
|
(11,918
|
)
|
|
(4,902
|
)
|
||
Fair value of investments
|
$
|
396,797
|
|
|
$
|
277,499
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Total deferred tax assets
|
$
|
310
|
|
|
$
|
—
|
|
Total deferred tax liabilities
|
(225
|
)
|
|
(4
|
)
|
||
Valuation allowance on net deferred tax assets
|
(85
|
)
|
|
—
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Per share operating performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net asset value per share at beginning of year
|
$
|
14.12
|
|
|
$
|
14.82
|
|
|
$
|
14.76
|
|
|
$
|
14.24
|
|
|
$
|
14.58
|
|
Distributions
|
(1.73
|
)
|
|
(1.36
|
)
|
|
(1.36
|
)
|
|
(1.36
|
)
|
|
(1.36
|
)
|
|||||
Net investment income
(10)
|
1.38
|
|
|
1.28
|
|
|
1.46
|
|
|
1.39
|
|
|
0.95
|
|
|||||
Net realized gain (loss) on non-control/non-affiliate investments
(10)
|
(0.37
|
)
|
|
(0.26
|
)
|
|
0.25
|
|
|
(0.31
|
)
|
|
0.02
|
|
|||||
Net realized gain on affiliate investments
(10)
|
0.01
|
|
|
0.81
|
|
|
—
|
|
|
0.14
|
|
|
—
|
|
|||||
Net realized loss on control investment
(10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.37
|
)
|
|||||
Net unrealized appreciation (depreciation) on non-control/non-affiliate investments
(10)
|
(0.19
|
)
|
|
(0.78
|
)
|
|
(0.69
|
)
|
|
0.53
|
|
|
0.05
|
|
|||||
Net unrealized appreciation (depreciation) on affiliate investments
(10)
|
(0.06
|
)
|
|
(0.41
|
)
|
|
0.33
|
|
|
0.13
|
|
|
0.19
|
|
|||||
Net unrealized appreciation on control investment
(10)
|
(0.06
|
)
|
|
—
|
|
|
0.07
|
|
|
—
|
|
|
0.18
|
|
|||||
Issuance of common stock
(5)
|
—
|
|
|
(0.03
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
(6)
|
—
|
|
|
0.05
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net asset value per share at end of year
|
$
|
13.10
|
|
|
$
|
14.12
|
|
|
$
|
14.82
|
|
|
$
|
14.76
|
|
|
$
|
14.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Per share market value, end of period
|
$
|
10.60
|
|
|
$
|
11.90
|
|
|
$
|
13.76
|
|
|
$
|
11.48
|
|
|
$
|
11.78
|
|
Total return based on market value
(1)
|
3.5
|
%
|
|
(4.7
|
)%
|
|
32.3
|
%
|
|
9.0
|
%
|
|
2.4
|
%
|
|||||
Total return based on net asset value
(2)
|
7.8
|
%
|
|
5.0
|
%
|
|
10.9
|
%
|
|
16.0
|
%
|
|
7.5
|
%
|
|||||
Shares outstanding at end of period
|
13,357,337
|
|
|
13,340,217
|
|
|
9,700,297
|
|
|
9,691,170
|
|
|
9,650,834
|
|
|||||
Weighted average shares outstanding
|
13,348,203
|
|
|
12,403,706
|
|
|
9,693,801
|
|
|
9,670,153
|
|
|
9,634,471
|
|
|||||
Ratio/Supplemental Data (in thousands except ratios)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Average net asset value
(3)
|
$
|
182,468
|
|
|
$
|
171,631
|
|
|
$
|
142,818
|
|
|
$
|
140,002
|
|
|
$
|
138,131
|
|
Net asset value at end of year
|
$
|
175,023
|
|
|
$
|
188,336
|
|
|
$
|
143,778
|
|
|
$
|
143,012
|
|
|
$
|
137,471
|
|
Net investment income
|
$
|
18,385
|
|
|
$
|
15,877
|
|
|
$
|
14,145
|
|
|
$
|
13,411
|
|
|
$
|
9,135
|
|
Ratio of total expenses, net to average net assets
(8)
|
13.4
|
%
|
|
10.2
|
%
|
|
11.9
|
%
|
|
13.5
|
%
|
|
9.9
|
%
|
|||||
Ratio of net investment income to average net assets
(9)
|
10.5
|
%
|
|
8.4
|
%
|
|
9.8
|
%
|
|
9.6
|
%
|
|
6.6
|
%
|
|||||
Portfolio turnover
(7)
|
41.9
|
%
|
|
50.4
|
%
|
|
18.1
|
%
|
|
44.6
|
%
|
|
34.9
|
%
|
(1)
|
Calculation is ending market price less beginning market price, adjusted for distributions reinvested at prices based on the Company’s dividend reinvestment plan for the respective distributions.
|
(2)
|
Calculation is ending net asset value less beginning net asset value, adjusting for dividends and distributions reinvested at the Company’s dividend reinvestment plan for the respective distributions.
|
(3)
|
Based on the average of the net asset value at the beginning of the indicated period and the end of each calendar quarter within the period indicated.
|
(4)
|
Reserved.
|
(5)
|
The issuance of common stock on a per share basis reflects the incremental net asset value change as a result of the Offering.
|
(6)
|
Represents the impact of different share amounts used in calculating per share data as a result of calculating certain per share data based on a weighted average shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.
|
(7)
|
Portfolio turnover rate is calculated using the lesser of year-to-date sales and principal payments or year-to-date purchases over the average of the investments at fair value.
|
(8)
|
Ratio of total expenses before incentive fee waiver to average net assets was 13.4% for the year ended December 31, 2018.
|
(9)
|
Ratio of net investment income before incentive fee waiver to average net assets was 10.5% for the year ended December 31, 2018.
|
(10)
|
Calculated on the average share method.
|
|
Date Declared
|
|
Record Date
|
|
Payment Date
|
|
Amount
Per Share
|
|
Cash
Distribution
|
|
DRIP Shares
Issued
|
|
DRIP Shares
Value
|
|||||||
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
March 7, 2016
|
|
March 17, 2016
|
|
March 31, 2016
|
|
$
|
0.34
|
|
|
$
|
3,280
|
|
|
1,154
|
|
|
$
|
15
|
|
May 2, 2016
|
|
June 16, 2016
|
|
June 30, 2016
|
|
0.34
|
|
|
3,269
|
|
|
1,998
|
|
|
26
|
|
|||
August 5, 2016
|
|
September 16, 2016
|
|
September 30, 2016
|
|
0.34
|
|
|
3,258
|
|
|
2,888
|
|
|
38
|
|
|||
October 31, 2016
|
|
December 16, 2016
|
|
December 30, 2016
|
|
0.34
|
|
|
3,255
|
|
|
3,087
|
|
|
43
|
|
|||
|
|
|
|
|
|
$
|
1.36
|
|
|
$
|
13,062
|
|
|
9,127
|
|
|
$
|
122
|
|
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
March 9, 2017
|
|
March 17, 2017
|
|
March 31, 2017
|
|
$
|
0.34
|
|
|
$
|
3,257
|
|
|
2,919
|
|
|
$
|
41
|
|
May 2, 2017
|
|
June 16, 2017
|
|
June 30, 2017
|
|
0.34
|
|
|
4,483
|
|
|
3,439
|
|
|
49
|
|
|||
August 1, 2017
|
|
September 15, 2017
|
|
September 29, 2017
|
|
0.34
|
|
|
4,491
|
|
|
3,196
|
|
|
42
|
|
|||
October 31, 2017
|
|
December 15, 2017
|
|
December 29, 2917
|
|
0.34
|
|
|
4,469
|
|
|
5,366
|
|
|
64
|
|
|||
|
|
|
|
|
|
$
|
1.36
|
|
|
$
|
16,700
|
|
|
14,920
|
|
|
$
|
196
|
|
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
February 12, 2018 (1)
|
|
March 22, 2018
|
|
March 29, 2018
|
|
$
|
0.37
|
|
|
$
|
4,886
|
|
|
4,459
|
|
|
$
|
50
|
|
February 27, 2018
|
|
March 22, 2018
|
|
March 29, 2018
|
|
0.34
|
|
|
4,490
|
|
|
4,098
|
|
|
46
|
|
|||
May 1, 2018
|
|
June 22, 2018
|
|
June 29, 2018
|
|
0.34
|
|
|
4,518
|
|
|
1,684
|
|
|
20
|
|
|||
August 3, 2018
|
|
September 14, 2018
|
|
September 28, 2018
|
|
0.34
|
|
|
4,511
|
|
|
2,366
|
|
|
28
|
|
|||
October 30, 2018
|
|
December 17, 2018
|
|
December 31, 2018
|
|
0.34
|
|
|
4,489
|
|
|
4,813
|
|
|
51
|
|
|||
|
|
|
|
|
|
$
|
1.73
|
|
|
$
|
22,894
|
|
|
17,420
|
|
|
$
|
195
|
|
For the Year Ended
|
|
DRIP Shares Value
|
|
Total Distribution Declared
|
|
DRIP Shares Issued
|
|
Average Value Per Share
|
|||||||
December 31, 2018
|
|
$
|
195
|
|
|
$
|
23,089
|
|
|
17,420
|
|
|
$
|
11.16
|
|
December 31, 2017
|
|
196
|
|
|
16,896
|
|
|
14,920
|
|
|
13.18
|
|
|||
December 31, 2016
|
|
122
|
|
|
13,184
|
|
|
9,127
|
|
|
13.23
|
|
|
|
Three Months Ended
|
||||||||||||||
|
December 31,
2018
|
|
September 30,
2018
|
|
June 30,
2018
|
|
March 31,
2018
|
||||||||
Total investment income
|
$
|
12,571
|
|
|
$
|
10,982
|
|
|
$
|
10,278
|
|
|
$
|
9,003
|
|
Net investment income
|
5,321
|
|
|
4,690
|
|
|
4,558
|
|
|
3,816
|
|
||||
Net gain (loss) on investments
|
(9,416
|
)
|
|
489
|
|
|
437
|
|
|
(323
|
)
|
||||
Net increase (decrease) in net assets resulting from operations
|
(4,095
|
)
|
|
5,179
|
|
|
4,995
|
|
|
3,493
|
|
||||
Net investment income per share – basic and diluted
(1)
|
$
|
0.40
|
|
|
$
|
0.35
|
|
|
$
|
0.34
|
|
|
$
|
0.29
|
|
Net increase (decrease) in net assets resulting from operations per share – basic and diluted
(1)
|
$
|
(0.30
|
)
|
|
$
|
0.39
|
|
|
$
|
0.37
|
|
|
$
|
0.26
|
|
Net asset value per share
(2)
|
$
|
13.10
|
|
|
$
|
13.75
|
|
|
$
|
13.70
|
|
|
$
|
13.67
|
|
|
Three Months Ended
|
||||||||||||||
|
December 31,
2017
|
|
September 30,
2017
|
|
June 30,
2017
|
|
March 31,
2017
|
||||||||
Total investment income
|
$
|
8,292
|
|
|
$
|
9,122
|
|
|
$
|
7,978
|
|
|
$
|
8,034
|
|
Net investment income
|
3,819
|
|
|
4,402
|
|
|
4,316
|
|
|
3,340
|
|
||||
Net gain (loss) on investments
|
331
|
|
|
(3,227
|
)
|
|
(6,597
|
)
|
|
1,526
|
|
||||
Net increase (decrease) in net assets resulting from operations
|
4,150
|
|
|
1,175
|
|
|
(2,281
|
)
|
|
4,866
|
|
||||
Net investment income per share – basic and diluted
(1)
|
$
|
0.28
|
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
0.34
|
|
Net increase (decrease) in net assets resulting from operations per share – basic and diluted
(1)
|
$
|
0.22
|
|
|
$
|
0.09
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.50
|
|
Net asset value per share
(2)
|
$
|
14.12
|
|
|
$
|
14.15
|
|
|
$
|
14.40
|
|
|
$
|
14.98
|
|
(1)
|
Based on weighted average shares outstanding for the respective period.
|
(2)
|
Based on shares outstanding at the end of the respective period.
|
|
|
|
|
|
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/ (depreciation)
|
|
Interest & PIK Interest
|
|
Dividends
|
|
Fees
|
|
Total Income
(2)
|
|
December 31, 2017, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2018, Fair Value
(5)
|
||||||||||||||||||||
Control Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
MTE Holding Corp.
|
|
Subordinated Secured Loan
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
1,115
|
|
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
1,181
|
|
|
$
|
7,118
|
|
|
$
|
177
|
|
|
$
|
—
|
|
|
$
|
7,296
|
|
|
|
Common Equity
|
|
—
|
|
|
(801
|
)
|
|
—
|
|
|
185
|
|
|
—
|
|
|
185
|
|
|
3,450
|
|
|
—
|
|
|
(801
|
)
|
|
2,649
|
|
||||||||||
|
|
|
|
—
|
|
|
(747
|
)
|
|
1,115
|
|
|
185
|
|
|
66
|
|
|
1,366
|
|
|
10,568
|
|
|
177
|
|
|
(801
|
)
|
|
9,945
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Total Control Investment
|
|
|
|
|
|
(747
|
)
|
|
1,115
|
|
|
185
|
|
|
66
|
|
|
1,366
|
|
|
10,568
|
|
|
177
|
|
|
(801
|
)
|
|
9,945
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
3rd Rock Gaming Holdings, LLC
|
|
Senior Secured Loan
|
|
—
|
|
|
(1,330
|
)
|
|
1,777
|
|
|
—
|
|
|
—
|
|
|
1,777
|
|
|
—
|
|
|
21,750
|
|
|
(1,727
|
)
|
|
20,023
|
|
||||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
(1,474
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,560
|
|
|
(1,487
|
)
|
|
1,073
|
|
||||||||||
|
|
|
|
—
|
|
|
(2,804
|
)
|
|
1,777
|
|
|
—
|
|
|
—
|
|
|
1,777
|
|
|
—
|
|
|
24,310
|
|
|
(3,214
|
)
|
|
21,096
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
All Metals Holding, LLC
|
|
Senior Secured Loan
|
|
—
|
|
|
(471
|
)
|
|
2,748
|
|
|
—
|
|
|
588
|
|
|
3,336
|
|
|
12,759
|
|
|
7,230
|
|
|
(19,989
|
)
|
|
—
|
|
||||||||||
|
|
Common Equity
(6)
|
|
4,118
|
|
|
(1,220
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,785
|
|
|
258
|
|
|
(2,043
|
)
|
|
—
|
|
||||||||||
|
|
|
|
4,118
|
|
|
(1,691
|
)
|
|
2,748
|
|
|
—
|
|
|
588
|
|
|
3,336
|
|
|
14,544
|
|
|
7,488
|
|
|
(22,032
|
)
|
|
—
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Contract Datascan Holdings, Inc.
|
|
Subordinated Loan
|
|
—
|
|
|
(5
|
)
|
|
950
|
|
|
—
|
|
|
—
|
|
|
950
|
|
|
8,000
|
|
|
6
|
|
|
(6
|
)
|
|
8,000
|
|
||||||||||
|
|
Preferred Equity A
(7)
|
|
—
|
|
|
91
|
|
|
597
|
|
|
—
|
|
|
—
|
|
|
597
|
|
|
5,964
|
|
|
688
|
|
|
—
|
|
|
6,652
|
|
||||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
2,053
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
260
|
|
|
2,053
|
|
|
—
|
|
|
2,313
|
|
||||||||||
|
|
|
|
—
|
|
|
2,139
|
|
|
1,547
|
|
|
—
|
|
|
—
|
|
|
1,547
|
|
|
14,224
|
|
|
2,747
|
|
|
(6
|
)
|
|
16,965
|
|
|
|
|
|
|
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/ (depreciation)
|
|
Interest & PIK Interest
|
|
Dividends
|
|
Fees
|
|
Total Income
(2)
|
|
December 31, 2017, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2018, Fair Value
(5)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
DRS Imaging Services, LLC
|
|
Senior Secured Loan
|
|
$
|
—
|
|
|
$
|
(157
|
)
|
|
$
|
659
|
|
|
$
|
—
|
|
|
$
|
163
|
|
|
$
|
822
|
|
|
$
|
—
|
|
|
$
|
10,802
|
|
|
$
|
(185
|
)
|
|
$
|
10,617
|
|
|
|
Common Equity
(6)
|
|
—
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,197
|
|
|
—
|
|
|
1,197
|
|
||||||||||
|
|
|
|
—
|
|
|
(95
|
)
|
|
659
|
|
|
—
|
|
|
163
|
|
|
822
|
|
|
—
|
|
|
11,999
|
|
|
(185
|
)
|
|
11,814
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Jobson Healthcare Information (8)
|
|
Senior Secured Loan
|
|
(3,477
|
)
|
|
2,331
|
|
|
905
|
|
|
—
|
|
|
—
|
|
|
905
|
|
|
12,910
|
|
|
2,751
|
|
|
(15,661
|
)
|
|
—
|
|
||||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
Warrants
(6)
|
|
(454
|
)
|
|
454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
454
|
|
|
(454
|
)
|
|
—
|
|
||||||||||
|
|
|
|
(3,931
|
)
|
|
2,785
|
|
|
905
|
|
|
—
|
|
|
—
|
|
|
905
|
|
|
12,910
|
|
|
3,205
|
|
|
(16,115
|
)
|
|
—
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Master Cutlery, LLC
|
|
Subordinated Loan
|
|
—
|
|
|
(2,095
|
)
|
|
156
|
|
|
—
|
|
|
—
|
|
|
156
|
|
|
2,873
|
|
|
117
|
|
|
(2,140
|
)
|
|
850
|
|
||||||||||
|
|
Preferred Equity
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
|
|
—
|
|
|
(2,095
|
)
|
|
156
|
|
|
—
|
|
|
—
|
|
|
156
|
|
|
2,873
|
|
|
117
|
|
|
(2,140
|
)
|
|
850
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
NeoSystems Corp.
|
|
Subordinated Loan
|
|
—
|
|
|
(7
|
)
|
|
283
|
|
|
—
|
|
|
—
|
|
|
283
|
|
|
2,143
|
|
|
47
|
|
|
(2,190
|
)
|
|
—
|
|
||||||||||
|
|
Preferred Stock
(7)
|
|
—
|
|
|
(145
|
)
|
|
146
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|
2,248
|
|
|
147
|
|
|
(145
|
)
|
|
2,250
|
|
||||||||||
|
|
|
|
—
|
|
|
(152
|
)
|
|
429
|
|
|
—
|
|
|
—
|
|
|
429
|
|
|
4,391
|
|
|
194
|
|
|
(2,335
|
)
|
|
2,250
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Pfanstiehl Holdings, Inc
|
|
Subordinated Loan
|
|
—
|
|
|
42
|
|
|
392
|
|
|
—
|
|
|
—
|
|
|
392
|
|
|
3,755
|
|
|
42
|
|
|
(9
|
)
|
|
3,788
|
|
||||||||||
|
|
Common Equity
|
|
—
|
|
|
3,605
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
130
|
|
|
4,755
|
|
|
3,605
|
|
|
—
|
|
|
8,360
|
|
||||||||||
|
|
|
|
—
|
|
|
3,647
|
|
|
392
|
|
|
130
|
|
|
—
|
|
|
522
|
|
|
8,510
|
|
|
3,647
|
|
|
(9
|
)
|
|
12,148
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/ (depreciation)
|
|
Interest & PIK Interest
|
|
Dividends
|
|
Fees
|
|
Total Income
(2)
|
|
December 31, 2017, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2018, Fair Value
(5)
|
||||||||||||||||||||
Professional Pipe Holdings, LLC
|
|
Senior Secured Loan
|
|
$
|
—
|
|
|
$
|
(181
|
)
|
|
$
|
845
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
845
|
|
|
$
|
—
|
|
|
$
|
8,355
|
|
|
$
|
(889
|
)
|
|
$
|
7,466
|
|
|
|
Common Equity
(6)
|
|
—
|
|
|
(645
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,414
|
|
|
(645
|
)
|
|
769
|
|
||||||||||
|
|
|
|
—
|
|
|
(826
|
)
|
|
845
|
|
|
—
|
|
|
—
|
|
|
845
|
|
|
—
|
|
|
9,769
|
|
|
(1,534
|
)
|
|
8,235
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
TRS Services, Inc.
|
|
Senior Secured Loan
|
|
—
|
|
|
(307
|
)
|
|
1,856
|
|
|
—
|
|
|
9
|
|
|
1,865
|
|
|
9,466
|
|
|
7,942
|
|
|
(2,962
|
)
|
|
14,446
|
|
||||||||||
|
|
Preferred Equity (Class AA units)
(7)
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
409
|
|
|
64
|
|
|
—
|
|
|
473
|
|
||||||||||
|
|
Preferred Equity (Class A units)
(6)
|
|
—
|
|
|
(1,404
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,230
|
|
|
—
|
|
|
(1,404
|
)
|
|
826
|
|
||||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
|
|
—
|
|
|
(1,711
|
)
|
|
1,918
|
|
|
—
|
|
|
9
|
|
|
1,927
|
|
|
12,105
|
|
|
8,006
|
|
|
(4,366
|
)
|
|
15,745
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Total Affiliate Investments
|
|
|
|
187
|
|
|
(803
|
)
|
|
11,376
|
|
|
130
|
|
|
760
|
|
|
12,266
|
|
|
69,557
|
|
|
71,482
|
|
|
(51,936
|
)
|
|
89,103
|
|
||||||||||
Total Control and Affiliate Investments
|
|
|
|
$
|
187
|
|
|
$
|
(1,550
|
)
|
|
$
|
12,491
|
|
|
$
|
315
|
|
|
$
|
826
|
|
|
$
|
13,632
|
|
|
$
|
80,125
|
|
|
$
|
71,659
|
|
|
$
|
(52,737
|
)
|
|
$
|
99,048
|
|
(1)
|
Principal balance of debt investments and ownership detail for equity investments are shown in the consolidated schedule of investments. The Company's investments are generally classified as "restricted securities" as such term is defined under Regulation S-X Rule 6-03(f) or Securities Act Rule 144.
|
(2)
|
Represents the total amount of interest, fees or dividends included in 2018 income for the portion of the year ended
December 31, 2018
, that an investment was included in Control or Affiliate Investment categories, respectively.
|
(3)
|
Gross additions include increases in cost basis resulting from a new portfolio investment, PIK interest, fees and dividends, accretion of OID, and net increases in unrealized net appreciation or decreases in net unrealized depreciation.
|
(4)
|
Gross reductions include decreases in the cost basis of investments resulting from principal repayments and sales, if any, and net decreases in net unrealized appreciation or net increases in net unrealized depreciation.
|
(5)
|
Fair value was determined using significant unobservable inputs. See
Note 5
for further details.
|
(6)
|
Non-income producing.
|
(7)
|
Dividends credited to income include dividends contractually earned but not declared.
|
(8)
|
Jobson became an affiliate investment effective December 31, 2017, due to an increase in voting ownership interest.
|
|
|
|
|
|
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/(depreciation)
|
|
Interest & PIK Interest
|
|
Dividends
|
|
Fees
|
|
Total Income
(2)
|
|
December 31, 2016, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2017, Fair Value
(5)
|
||||||||||||||||||||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Malabar International
|
|
Subordinated Loan
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
504
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
536
|
|
|
$
|
7,683
|
|
|
$
|
150
|
|
|
$
|
(7,833
|
)
|
|
$
|
—
|
|
|
|
Preferred Equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
65
|
|
|
5,868
|
|
|
1,608
|
|
|
(7,476
|
)
|
|
—
|
|
||||||||||
|
|
|
|
—
|
|
|
—
|
|
|
504
|
|
|
65
|
|
|
32
|
|
|
601
|
|
|
13,551
|
|
|
1,758
|
|
|
(15,309
|
)
|
|
—
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
MTE Holding Corp.
|
|
Senior Secured Loan
|
|
—
|
|
|
(64
|
)
|
|
1,168
|
|
|
—
|
|
|
120
|
|
|
1,288
|
|
|
9,766
|
|
|
90
|
|
|
(2,738
|
)
|
|
7,118
|
|
||||||||||
|
|
Common Equity
|
|
—
|
|
|
67
|
|
|
—
|
|
|
227
|
|
|
—
|
|
|
227
|
|
|
3,383
|
|
|
67
|
|
|
—
|
|
|
3,450
|
|
||||||||||
|
|
|
|
—
|
|
|
3
|
|
|
1,168
|
|
|
227
|
|
|
120
|
|
|
1,515
|
|
|
13,149
|
|
|
157
|
|
|
(2,738
|
)
|
|
10,568
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Total Control Investments
|
|
|
|
—
|
|
|
3
|
|
|
1,672
|
|
|
292
|
|
|
152
|
|
|
2,116
|
|
|
26,700
|
|
|
1,915
|
|
|
(18,047
|
)
|
|
10,568
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
All Metals Holding, LLC
|
|
Senior Secured Loan
|
|
—
|
|
|
(259
|
)
|
|
1,830
|
|
|
—
|
|
|
26
|
|
|
1,856
|
|
|
12,865
|
|
|
283
|
|
|
(389
|
)
|
|
12,759
|
|
||||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
508
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,277
|
|
|
508
|
|
|
—
|
|
|
1,785
|
|
||||||||||
|
|
|
|
—
|
|
|
249
|
|
|
1,830
|
|
|
—
|
|
|
26
|
|
|
1,856
|
|
|
14,142
|
|
|
791
|
|
|
(389
|
)
|
|
14,544
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Contract Datascan Holdings, Inc.
|
|
Subordinated Loan
|
|
—
|
|
|
93
|
|
|
978
|
|
|
—
|
|
|
—
|
|
|
978
|
|
|
7,902
|
|
|
98
|
|
|
—
|
|
|
8,000
|
|
||||||||||
|
|
Preferred Equity
(6) (7)
|
|
—
|
|
|
—
|
|
|
542
|
|
|
—
|
|
|
—
|
|
|
542
|
|
|
5,421
|
|
|
543
|
|
|
—
|
|
|
5,964
|
|
||||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
187
|
|
|
—
|
|
|
73
|
|
|
260
|
|
||||||||||
|
|
|
|
—
|
|
|
166
|
|
|
1,520
|
|
|
—
|
|
|
—
|
|
|
1,520
|
|
|
13,510
|
|
|
641
|
|
|
73
|
|
|
14,224
|
|
|
|
|
|
|
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/(depreciation)
|
|
Interest & PIK Interest
|
|
Dividends
|
|
Fees
|
|
Total Income
(2)
|
|
December 31, 2016, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2017, Fair Value
(5)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Intelli-Mark Technologies, Inc.
|
|
Senior Secured Loan
|
|
$
|
—
|
|
|
$
|
(159
|
)
|
|
$
|
438
|
|
|
$
|
—
|
|
|
$
|
175
|
|
|
$
|
613
|
|
|
$
|
8,841
|
|
|
$
|
68
|
|
|
$
|
(8,909
|
)
|
|
$
|
—
|
|
|
|
Common Equity
(6)
|
|
874
|
|
|
(498
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,998
|
|
|
—
|
|
|
(1,998
|
)
|
|
—
|
|
||||||||||
|
|
|
|
874
|
|
|
(657
|
)
|
|
438
|
|
|
—
|
|
|
175
|
|
|
613
|
|
|
10,839
|
|
|
68
|
|
|
(10,907
|
)
|
|
—
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Jobson Healthcare Information, LLC
(8)
|
|
Senior Secured Loan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,910
|
|
|
—
|
|
|
12,910
|
|
||||||||||
|
|
Common Equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
Warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,910
|
|
|
—
|
|
|
12,910
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Malabar International
(9)
|
|
Subordinated Loan
|
|
—
|
|
|
(41
|
)
|
|
415
|
|
|
—
|
|
|
256
|
|
|
671
|
|
|
—
|
|
|
7,833
|
|
|
(7,833
|
)
|
|
—
|
|
||||||||||
|
|
Preferred Equity
|
|
5,590
|
|
|
(1,585
|
)
|
|
—
|
|
|
56
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
7,476
|
|
|
(7,476
|
)
|
|
—
|
|
||||||||||
|
|
|
|
5,590
|
|
|
(1,626
|
)
|
|
415
|
|
|
56
|
|
|
256
|
|
|
727
|
|
|
—
|
|
|
15,309
|
|
|
(15,309
|
)
|
|
—
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Master Cutlery, LLC
|
|
Subordinated Loan
|
|
—
|
|
|
(1,537
|
)
|
|
640
|
|
|
—
|
|
|
—
|
|
|
640
|
|
|
4,440
|
|
|
653
|
|
|
(2,220
|
)
|
|
2,873
|
|
||||||||||
|
|
Preferred Equity
(6) (7)
|
|
—
|
|
|
(954
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
954
|
|
|
—
|
|
|
(954
|
)
|
|
—
|
|
||||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
|
|
—
|
|
|
(2,491
|
)
|
|
640
|
|
|
—
|
|
|
—
|
|
|
640
|
|
|
5,394
|
|
|
653
|
|
|
(3,174
|
)
|
|
2,873
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
NeoSystems Corp.
|
|
Subordinated Loan
|
|
—
|
|
|
421
|
|
|
408
|
|
|
—
|
|
|
—
|
|
|
408
|
|
|
3,656
|
|
|
487
|
|
|
(2,000
|
)
|
|
2,143
|
|
||||||||||
|
|
Preferred Equity
(6) (7)
|
|
—
|
|
|
861
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
133
|
|
|
1,255
|
|
|
993
|
|
|
—
|
|
|
2,248
|
|
||||||||||
|
|
|
|
—
|
|
|
1,282
|
|
|
541
|
|
|
—
|
|
|
—
|
|
|
541
|
|
|
4,911
|
|
|
1,480
|
|
|
(2,000
|
)
|
|
4,391
|
|
|
|
|
|
|
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/(depreciation)
|
|
Interest & PIK Interest
|
|
Dividends
|
|
Fees
|
|
Total Income
(2)
|
|
December 31, 2016, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2017, Fair Value
(5)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Pfanstiehl Holdings, Inc
|
|
Subordinated Loan
|
|
$
|
—
|
|
|
$
|
(46
|
)
|
|
$
|
387
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
387
|
|
|
$
|
3,810
|
|
|
$
|
1
|
|
|
$
|
(56
|
)
|
|
$
|
3,755
|
|
|
|
Common Equity
|
|
—
|
|
|
(1,328
|
)
|
|
—
|
|
|
84
|
|
|
—
|
|
|
84
|
|
|
6,083
|
|
|
—
|
|
|
(1,328
|
)
|
|
4,755
|
|
||||||||||
|
|
|
|
—
|
|
|
(1,374
|
)
|
|
387
|
|
|
84
|
|
|
—
|
|
|
471
|
|
|
9,893
|
|
|
1
|
|
|
(1,384
|
)
|
|
8,510
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Strategic Pharma Solutions, Inc.
|
|
Senior Secured Loan
|
|
—
|
|
|
(39
|
)
|
|
746
|
|
|
—
|
|
|
158
|
|
|
904
|
|
|
8,383
|
|
|
67
|
|
|
(8,450
|
)
|
|
—
|
|
||||||||||
|
|
Preferred Equity
(6) (7)
|
|
3,617
|
|
|
(1,111
|
)
|
|
81
|
|
|
—
|
|
|
—
|
|
|
81
|
|
|
3,026
|
|
|
81
|
|
|
(3,107
|
)
|
|
—
|
|
||||||||||
|
|
|
|
3,617
|
|
|
(1,150
|
)
|
|
827
|
|
|
—
|
|
|
158
|
|
|
985
|
|
|
11,409
|
|
|
148
|
|
|
(11,557
|
)
|
|
—
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
TRS Services, Inc.
|
|
Senior Secured Loan
|
|
—
|
|
|
194
|
|
|
1,024
|
|
|
—
|
|
|
60
|
|
|
1,084
|
|
|
9,549
|
|
|
310
|
|
|
(393
|
)
|
|
9,466
|
|
||||||||||
|
|
Preferred Equity (Class AA units)
(6)(7)
|
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|
354
|
|
|
55
|
|
|
—
|
|
|
409
|
|
||||||||||
|
|
Preferred Equity (Class A units)
(6)(7)
|
|
—
|
|
|
319
|
|
|
204
|
|
|
—
|
|
|
—
|
|
|
204
|
|
|
1,707
|
|
|
523
|
|
|
—
|
|
|
2,230
|
|
||||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
|
|
—
|
|
|
513
|
|
|
1,283
|
|
|
—
|
|
|
60
|
|
|
1,343
|
|
|
11,610
|
|
|
888
|
|
|
(393
|
)
|
|
12,105
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Total Affiliate Investments
|
|
|
|
10,081
|
|
|
(5,088
|
)
|
|
7,881
|
|
|
140
|
|
|
675
|
|
|
8,696
|
|
|
81,708
|
|
|
32,889
|
|
|
(45,040
|
)
|
|
69,557
|
|
||||||||||
Total Control and Affiliate Investments
|
|
|
|
$
|
10,081
|
|
|
$
|
(5,085
|
)
|
|
$
|
9,553
|
|
|
$
|
432
|
|
|
$
|
827
|
|
|
$
|
10,812
|
|
|
$
|
108,408
|
|
|
$
|
34,804
|
|
|
$
|
(63,087
|
)
|
|
$
|
80,125
|
|
|
(1)
|
Principal balance of debt investments and ownership detail for equity investments are shown in the consolidated schedule of investments.
|
(2)
|
Represents the total amount of interest, fees or dividends included in 2017 income for the portion of the year ended December 31, 2017, that an investment was included in Control or Affiliate Investment categories, respectively.
|
(3)
|
Gross additions include increases in cost basis resulting from a new portfolio investment, PIK interest, fees and dividends, accretion of OID, and net increases in unrealized net appreciation or decreases in net unrealized depreciation.
|
(4)
|
Gross reductions include decreases in the cost basis of investments resulting from principal repayments and sales, if any, and net decreases in net unrealized appreciation or net increases in net unrealized depreciation, and transfers from Affiliate Investment to Control Investment.
|
(5)
|
Fair value was determined using significant unobservable inputs. See Note 6 for further details.
|
(6)
|
Non-income producing.
|
(7)
|
Dividends credited to income include dividends contractually earned but not declared.
|
(8)
|
Jobson became an affiliate investment effective December 31, 2017, due to an increase in voting ownership interest.
|
(9)
|
Malabar was reclassified from a control investment to an affiliate investment due to a decrease in voting interest.
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
|
|
|
Incorporated by Reference
|
|
|
Exhibit
Number
|
|
Description
|
Form and SEC File No.
|
Filing Date with SEC
|
Filed with this 10-K
|
3.1
|
|
N-2 (333-166363)
|
March 18, 2011
|
|
|
|
|
|
|
|
|
3.2
|
|
10-K (814-00813)
|
March 26, 2013
|
|
|
|
|
|
|
|
|
3.3
|
|
N-2/A (333-166363)
|
March 18, 2011
|
|
|
|
|
|
|
|
|
4.1
|
|
N-2/A (333-166363)
|
March 18, 2011
|
|
|
|
|
|
|
|
|
4.2
|
|
N-2 (333-200376)
|
November 19, 2014
|
|
|
|
|
|
|
|
|
4.3
|
|
N-2/A (333-200376)
|
December 16, 2014
|
|
|
|
|
|
|
|
|
4.4
|
|
N-2/A (333-200376)
|
December 16, 2014
|
|
|
|
|
|
|
|
|
4.5
|
|
N-2/A (333-200376)
|
December 16, 2014
|
|
|
|
|
|
|
|
|
4.6
|
|
N-2/A (333-200376)
|
December 16, 2014
|
|
|
|
|
|
|
|
|
4.7
|
|
POS EX (333-217302)
|
April 16, 2018
|
|
|
|
|
|
|
|
|
4.8
|
|
POS EX (333-217302)
|
April 16, 2018
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
Exhibit
Number
|
|
Description
|
Form and SEC File No.
|
Filing Date with SEC
|
Filed with this 10-K
|
4.9
|
|
POS EX (333-222419)
|
October 16, 2018
|
|
|
|
|
|
|
|
|
4.10
|
|
POS EX (333-222419)
|
October 16, 2018
|
|
|
|
|
|
|
|
|
10.1
|
|
N-2/A (333-166363)
|
March 18, 2011
|
|
|
|
|
|
|
|
|
10.2
|
|
10-Q (814-00813)
|
November 7, 2014
|
|
|
|
|
|
|
|
|
10.3
|
|
N-2/A (333-166363)
|
March 18, 2011
|
|
|
|
|
|
|
|
|
10.4
|
|
N-2/A (333-166363)
|
March 18, 2011
|
|
|
|
|
|
|
|
|
10.5
|
|
N-2/A (333-166363)
|
March 18, 2011
|
|
|
|
|
|
|
|
|
10.6
|
|
N-2/A (333-166363)
|
March 18, 2011
|
|
|
|
|
|
|
|
|
10.7
|
|
N-2/A (333-166363)
|
July 24, 2012
|
|
|
|
|
|
|
|
|
10.8
|
|
8-K (814-00813)
|
June 2, 2015
|
|
|
|
|
|
|
|
|
10.9
|
|
10-K (814-00813)
|
March 12, 2018
|
|
|
|
|
|
|
|
|
10.10
|
|
10-Q (814-00813)
|
November 6, 2015
|
|
|
|
|
|
|
|
|
10.11
|
|
10-K (814-00813)
|
March 12, 2018
|
|
|
|
|
|
|
|
|
10.12
|
|
10-K (814-00813)
|
March 12, 2018
|
|
|
|
|
|
|
|
|
11.1
|
|
Computation of Per Share Earnings
|
|
|
+
|
|
|
|
|
|
|
14.1
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
Exhibit
Number
|
|
Description
|
Form and SEC File No.
|
Filing Date with SEC
|
Filed with this 10-K
|
21.1
|
|
|
|
*
|
|
|
|
|
|
|
|
31.1
|
|
|
|
*
|
|
|
|
|
|
|
|
31.2
|
|
|
|
*
|
|
|
|
|
|
|
|
32.1
|
|
|
|
†
|
|
|
|
|
|
|
|
32.2
|
|
|
|
†
|
*
|
Filed herewith.
|
+
|
Included in the notes to the financial statements contained in this report
|
†
|
Furnished herewith
|
Item 16.
|
Form 10-K Summary
|
|
OFS Capital Corporation
|
|
|
Date: March 15, 2019
|
/s/ Bilal Rashid
|
|
Bilal Rashid
Chief Executive Officer and Chairman of the Board of Directors
|
Date: March 15, 2019
|
/s/ Bilal Rashid
|
|
Bilal Rashid, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)
|
|
|
Date: March 15, 2019
|
/s/ Marc Abrams
|
|
Marc Abrams, Director
|
|
|
Date: March 15, 2019
|
/s/ Robert J. Cresci
|
|
Robert J. Cresci, Director
|
|
|
Date: March 15, 2019
|
/s/ Elaine E. Healy
|
|
Elaine E. Healy, Director
|
|
|
Date: March 15, 2019
|
/s/ Jeffrey A. Cerny
|
|
Jeffrey A. Cerny, Chief Financial Officer, Treasurer (Principal Financial Officer) and Director
|
|
|
Date: March 15, 2019
|
/s/ Jeff Owen
|
|
Jeff Owen, Chief Accounting Officer (Principal Accounting Officer)
|
I.
|
GENERAL (CODE OF ETHICS)
1
|
A.
|
INTRODUCTION
3
|
B.
|
STATEMENT OF STANDARDS OF BUSINESS CONDUCT
3
|
C.
|
PERIODIC COMPLIANCE AND TRAINING
7
|
D.
|
ACKNOWLEDGMENT
7
|
E.
|
REPORTING AND SANCTIONS
7
|
F.
|
ADDITIONAL RESTRICTIONS AND WAIVERS BY OFS ADVISER AND THE OFS FUNDS
8
|
G.
|
REVIEW BY THE BOARD OF DIRECTORS OF EACH OFS FUND
8
|
H.
|
CCO REPORTING
9
|
I.
|
CONFLICT WITH EMPLOYEE HANDBOOK
9
|
II.
|
PERSONAL INVESTMENT POLICY
10
|
A.
|
INTRODUCTION AND DEFINITIONS
10
|
B.
|
RECORDKEEPING AND REPORTING REQUIREMENTS
12
|
1.
|
Reports
12
|
2.
|
Determining Whether an Account is an Affiliated Account
13
|
3.
|
Managed Accounts
14
|
4.
|
Non-Transferable Accounts
14
|
5.
|
Transactions Subject to Review
15
|
C.
|
STATEMENT OF RESTRICTIONS
15
|
1.
|
Restricted List
15
|
2.
|
Private Placements and Initial Public Offerings
17
|
3.
|
Trades by OFS Fund Directors
17
|
4.
|
Trades of OFS Fund Securities or CMCT
17
|
5.
|
Trades by Access Persons Serving on Company Boards
17
|
6.
|
No Personal Trades Through OFS Adviser’s Traders
18
|
7.
|
Use of Brokerage for Personal or Family Benefit
18
|
8.
|
No “Front Running”
18
|
D.
|
REQUIREMENTS OF DISINTERESTED DIRECTORS
18
|
III.
|
INSIDE INFORMATION POLICY
19
|
A.
|
INTRODUCTION
19
|
B.
|
KEY TERMS
20
|
1.
|
What is a “Security”?
20
|
2.
|
Who is an Insider?
20
|
3.
|
What is Material Information?
21
|
4.
|
What is Nonpublic Information?
22
|
5.
|
Contacts with Companies
22
|
6.
|
Tender Offers
22
|
7.
|
Penalties for Insider Trading
22
|
C.
|
INSIDER TRADING PROCEDURES
23
|
1.
|
Identifying Inside Information
23
|
2.
|
Restricting Access to Material and Nonpublic Information
23
|
3.
|
Review and Dissemination of Certain Investment Related Information
24
|
4.
|
Determination of Materiality
24
|
5.
|
Policies and Procedures Relating to Paid Research Consultants and Expert Network Firms Regarding Securities
24
|
IV.
|
GIFTS, ENTERTAINMENT AND POLITICAL ACTIVITIES
27
|
A.
|
INTRODUCTION
27
|
B.
|
GIFTS AND ENTERTAINMENT POLICY
27
|
1.
|
Business Meals
27
|
2.
|
Providing Gifts
28
|
3.
|
Receiving Gifts
28
|
4.
|
Entertainment
29
|
5.
|
Travel and Lodging
29
|
6.
|
Providing Meals, Gifts and Entertainment to Public Officials and Union Employees
30
|
7.
|
Receipt of Meals, Gifts or Entertainment by Traders from Brokers/Agent Bank Employees
30
|
C.
|
POLITICAL ACTIVITY POLICY
30
|
1.
|
Introduction
30
|
2.
|
Indirect Violations
32
|
3.
|
Periodic Disclosure
32
|
V.
|
OUTSIDE AFFILIATIONS POLICY
33
|
A.
|
OUTSIDE BUSINESS ACTIVITIES
33
|
B.
|
DIRECTOR AND OFFICER POSITIONS
33
|
C.
|
EMPLOYEE RELATIONSHIPS
34
|
I.
|
GENERAL (CODE OF ETHICS)
|
A.
|
INTRODUCTION
|
•
|
the Personal Investment Policy,
|
•
|
the Inside Information Policy,
|
•
|
the Gifts and Entertainment Policy,
|
•
|
Political Activity Policy,
|
•
|
Outside Affiliations Policy, and
|
•
|
Anti-Corruption Policy.
|
All activities involving the OFS Funds are subject to the Company Act and the policies and procedures adopted by each OFS Fund in connection therewith as set forth in the Rule 38a-1 Compliance Manual (“38a-1 Manual”) for each OFS Fund. The obligations set forth in the Code and the 38a-1 Manual are in addition to and not in lieu of the policies and procedures set forth in the Firm’s Employee Handbook and any other Compliance Policies adopted by OFS Adviser in respect of the conduct of its business.
|
B.
|
STATEMENT OF STANDARDS OF BUSINESS CONDUCT
|
•
|
engaging a service provider on behalf of Advisory Clients or the Firm in which you or your Related Person has a financial interest.
|
•
|
accepting extravagant gifts or entertainment from a potential service provider to the Firm.
|
•
|
making charitable donations at the request of a prospective Advisory Client when the Advisory Client will directly benefit from such donation.
|
•
|
contributing to the reelection campaign of a Governor who has the authority to appoint pension plan board members who are responsible for selecting investment advisers for such pension plan.
|
•
|
purchasing an interest in a company or property that you know the Firm is targeting for investment.
|
•
|
assuming an outside position with a company that competes directly with the Firm.
|
1.
|
Supervised Persons and OFS Directors may not employ any device, scheme or artifice to defraud an OFS Fund or any Advisory Client, make any untrue statement of a material fact to an OFS Fund or any Advisory Client, or omit to state a material fact necessary in order to make the statements not misleading, engage in any act, practice or course of business that operates or would operate as a fraud or deceit upon an OFS Fund or any other Advisory Client,
|
2.
|
Except with the prior approval of a Compliance Officer, in consultation with a Supervised Person’s supervisor and/or Senior Management, a Supervised Person may not act as a director, officer, general partner, managing member, principal, proprietor, consultant, agent, representative, trustee or employee of any unaffiliated public or private entity or business other than an OFS Fund, OFS Adviser, or an Affiliate of OFS Adviser. (See Section IV)
|
3.
|
All Supervised Persons must disclose to OFS Adviser and their respective OFS Fund any interests they may have in any entity that is not affiliated with OFS Adviser or any OFS Fund
and
that has a known business relationship with OFS Adviser, an Affiliate of OFS Adviser or any OFS Fund.
|
4.
|
Except with the prior approval of a Compliance Officer, and as specifically permitted by law, Supervised Persons may not have a material direct or indirect interest (e.g., as principal, co-principal, agent, member, partner, or material shareholder or beneficiary) in any transaction that conflicts with the interests of OFS Adviser or its Advisory Clients.
|
5.
|
Except with the prior approval of a Compliance Officer, Access Persons may not invest in any Initial Public Offering (“IPO”) or Private Placement
(including hedge funds and other private investment vehicles). (See Section II.C.2) This requirement also applies to Private Placements that are Advisory Clients of OFS Adviser, such as OFS Credit Income Fund, L.P.
|
6.
|
No Supervised Person, except in the course of the rightful exercise of his or her job responsibilities, shall reveal to any other person, information regarding any Advisory Client or any investment or Security transaction being considered, recommended or executed on behalf of any Advisory Client. (See Section III.)
|
7.
|
No OFS Fund Director, except in the course of the rightful exercise of his or her board responsibilities, shall reveal to any other person information regarding any OFS Fund or any “Portfolio Company”, defined as any legal entity in which an OFS Fund or another Advisory Client holds an investment regardless of whether or not the investment is a Security, or any investment or Security transaction being considered, recommended, or executed on behalf of any other Advisory Client. (See Section III.)
|
8.
|
No Supervised Person shall make any recommendation concerning the purchase or sale of any Security by an Advisory Client without disclosing, to the extent known, the interest of the Firm or any Supervised Person, if any, in such Security or the issuer thereof, including, without limitation (a) any direct or indirect beneficial ownership of any Security of such issuer; (b) any contemplated transaction by such person in such Security; and (c) any present or proposed relationship with respect to such Security, issuer or its affiliates.
|
9.
|
Subject to certain exceptions permitted by applicable law, each OFS Fund shall not, directly or indirectly extend, maintain or arrange for the extension of credit or the renewal of an extension of credit, in the form of a personal loan to any officer or director of the Fund. Any Supervised Person or person who serves as a director on the board of directors of any OFS Fund (“OFS Fund Director”) who becomes aware that their respective OFS Fund may be extending or arranging for the extension of credit to a director or officer, or person serving an equivalent function, should notify and consult with a Compliance Officer to ensure that the proposed extension of credit complies with this Code and the applicable law.
|
10.
|
No Supervised Person shall engage in insider trading (as described in the “Inside Information Policy” in Section III.) whether for his or her own benefit or for the benefit of others.
|
11.
|
No Supervised Person may communicate material, nonpublic information concerning any Security, or its issuer, or Portfolio Company to anyone unless it is properly within his or her duties to do so. No OFS Fund Director may communicate material, nonpublic information concerning any Security of an issuer in which the OFS Fund Director knows, or, in the course of his or her duties as a director, should have known, OFS Fund has a current investment, or with respect to which an investment or Security is Being Considered for Purchase or Sale by any OFS Fund (“OFS Fund Portfolio Security”) or Portfolio Company of their respective OFS Fund to anyone unless it is properly within his or her duties to do so. A Security is “Being Considered for Purchase or Sale” when a recommendation to purchase or sell the Security has been made and communicated and, with respect to the person making the recommendation, when such person seriously considers making such a recommendation. In all cases, a Security which has been recommended for purchase or sale pursuant to an Investment Committee memorandum, presentation, due diligence package or other formal Investment Committee recommendation shall be deemed to be a Security Being Considered for Purchase or Sale.
|
12.
|
Each Supervised Person shall complete a compliance questionnaire (the “Regulatory Compliance Disclosure”) prior to employment and annually thereafter, within the prescribed deadline, as provided by the Compliance Department, (“Compliance Due Date”) through the Firm’s automated compliance system. Each Supervised Person shall supplement the Regulatory Compliance Disclosure, as necessary, to reflect any material changes between annual disclosures, and must immediately notify Compliance if any of the conditions addressed in the Regulatory Compliance Disclosure become applicable to such Supervised Person.
|
13.
|
Every Supervised Person must avoid any activity that might give rise to a question as to whether the Firm’s objectivity as a fiduciary has been compromised. (See Section V)
|
14.
|
Access Persons are required to disclose to a Compliance Officer the existence of any account that has the ability to hold any Reportable Securities (e.g., brokerage or trading accounts and IRAs), as well the account’s holdings (immediately upon commencement of employment (which shall include the accounts and holdings of the Access Person’s Related Persons), and in no case later than ten (10) calendar days beyond Access Person’s start date. Such Accounts must be disclosed even if they contain a zero balance or non-Reportable Securities. Access Persons are required to disclose accounts that are Managed Accounts; however, disclosing the holdings of such Managed Accounts is not required. With limited exceptions provided herein, Access Persons are also required to maintain Non-Managed Accounts capable of
|
15.
|
The intentional creation, transmission or use of false rumors is inconsistent with the Firm’s commitment to high ethical standards and may violate the antifraud provisions of the Advisers Act, among other securities laws of the United States. Accordingly, no Supervised Person may maliciously create, disseminate or use false rumors. This prohibition covers oral and written communications, including the use of electronic communication media such as e-mail, PIN messages, instant messages, tweets, text messages, blogs and chat rooms. Because of the difficulty identifying “false” rumors, the Firm discourages Supervised Persons from creating, passing or using any rumor.
|
C.
|
PERIODIC COMPLIANCE AND TRAINING
|
D.
|
ACKNOWLEDGMENT
|
E.
|
REPORTING AND SANCTIONS
|
F.
|
ADDITIONAL RESTRICTIONS AND WAIVERS BY OFS ADVISER AND THE OFS FUNDS
|
G.
|
REVIEW BY THE BOARD OF DIRECTORS OF EACH OFS FUND
|
H.
|
CCO REPORTING
|
I.
|
CONFIDENTIALITY
|
J.
|
CONFLICT WITH EMPLOYEE HANDBOOK
|
II.
|
PERSONAL INVESTMENT POLICY
|
A.
|
INTRODUCTION AND DEFINITIONS
|
B.
|
RECORDKEEPING AND REPORTING REQUIREMENTS
|
•
|
By the Compliance Due Date and no later than forty-five (45) calendar days following the end of each calendar year (i.e., February 14), every Access Person is required to certify, via the Firm’s automated compliance system, such Access Person’s Affiliated Accounts and Reportable Securities holdings in all Non-Managed Accounts as of year-end. Any holdings in Reportable Securities in a Non-Managed Account not included within the Firm’s automated compliance system should be reported separately by the Access Person.
|
C.
|
STATEMENT OF RESTRICTIONS
|
(a)
|
Securities
|
•
|
the Firm, any investment adviser Affiliate, or an Advisory Client purchases a Security of a particular issuer or such Security is Being Considered for Purchase or Sale;
|
•
|
the Firm or any investment adviser Affiliate executes a confidentiality agreement with or relating to an issuer;
|
•
|
the Firm, any investment adviser Affiliate, or an Advisory Client has declared itself “Private” with respect to an issuer in an electronic workspace;
|
•
|
the Firm becomes bound by a fiduciary obligation or other duty (for example, because an Access Person has become a board member of an issuer);
|
•
|
an Access Person becomes a member of an issuer’s board on behalf of the Firm or a Portfolio Company;
|
•
|
an Access Person becomes aware of (or is likely to become aware of) MNPI about a Security or issuer; or
|
•
|
the Firm, as determined by a Compliance Officer, has determined to include an issuer to avoid the appearance of impropriety and protect the Firm’s reputation for integrity and ethical conduct.
|
(b)
|
Procedures
|
•
|
Additions
:
Access Persons who become aware of any of the circumstances set forth in subsection 1.a) above, or who for any other reason believe an issuer or Security should be added to the Restricted List, should immediately notify a Compliance Officer in order to ensure that the Restricted List is updated.
|
•
|
Deletions
:
When the circumstances set forth in subsection 1.a) above no longer exist, or the Firm is no longer bound by the obligations giving rise to the inclusion of an issuer or Security on the Restricted List, Access Persons should notify a Compliance Officer so that the proposed removal can be assessed and the name of the issuer or Security can be promptly removed, as necessary, from the Restricted List.
|
•
|
Changes
:
From time to time, the Compliance Department will update the Restricted List as contemplated by this Personal Investment Policy and the Confidentiality Policy. Access Persons are responsible for checking the Restricted List in all cases before engaging in any Personal Securities Trade.
|
D.
|
REQUIREMENTS OF DISINTERESTED DIRECTORS
|
III.
|
INSIDE INFORMATION POLICY
|
A.
|
INTRODUCTION
|
B.
|
KEY TERMS
|
•
|
dividend or earnings announcements
|
•
|
write-downs or write-offs of assets
|
•
|
additions to reserves for bad debts or contingent liabilities
|
•
|
expansion or curtailment of company or major division operations
|
•
|
merger, joint venture announcements
|
•
|
new product/service/marketing announcements
|
•
|
new supplier/manufacturing/production announcements
|
•
|
material charge/impairment announcements
|
•
|
senior management changes
|
•
|
changes in control
|
•
|
material restatement of previously issued financial statements
|
•
|
discovery or research developments
|
•
|
criminal indictments and civil and government investigations, litigations and/or settlements
|
•
|
pending labor disputes
|
•
|
debt service or liquidity problems
|
•
|
bankruptcy or insolvency problems
|
•
|
tender offers, stock repurchase plans, etc.
|
•
|
recapitalizations
|
•
|
civil injunctions;
|
•
|
disgorgement of profits;
|
•
|
punitive damages (i.e., fines for the person who committed the violation of up to three (3) times the profit gained or loss avoided, irrespective of whether the person actually benefited personally);
|
•
|
felony convictions which include possible jail sentences; and
|
•
|
fines and sanctions against the employer or other controlling person.
|
C.
|
INSIDER TRADING PROCEDURES
|
•
|
Is the information material? Is this information that an investor would consider important in making his or her investment decisions (e.g., whether the investor should buy, sell or hold a Security)? Is this information that would substantially affect the market price of the Securities if generally disclosed?
|
•
|
Is the information nonpublic? To whom has this information been provided? Has the information been effectively communicated to the marketplace by being published in
Reuters
,
The Wall Street Journal
,
Bloomberg
or other publications of general circulation? Remember that information that has been communicated to a relatively large group of sophisticated investors does not by itself mean that the information is public (e.g., large group of potential bank debt investors during an
invitation only
meeting).
|
•
|
distribute materials containing MNPI only on a need-to-know” basis;
|
•
|
take care so that telephone conversations cannot be overheard when discussing matters involving MNPI (e.g., speaker telephones should generally be used in a way so that outsiders who might be in OFS Advisers’ offices are not inadvertently exposed to this information);
|
•
|
limit access to offices and conference rooms when these rooms contain MNPI; and
|
•
|
not leave materials containing MNPI displayed on the computer viewing screen when they leave their computers unattended.
|
•
|
The Supervised Person must obtain the prior written approval of a Compliance Officer before engaging a paid consultant if; (1) substantive information related to a Security or its issuer will be discussed as part of the engagement; and/or (2) the consultant is either employed with an issuer of Securities at the time of the engagement or was employed with such an issuer within six months of the engagement. The Compliance Department will maintain a log of all such engagements.
|
•
|
Prior to the commencement of a phone call or meeting with a paid consultant where (i) it is anticipated that substantive information related to a Security or its issuer will be discussed, and/or (ii) the consultant is either employed with an issuer of Securities at the time of the call or was employed with such an issuer within six months of the call, the Supervised Person must inform such consultant that:
|
(i)
|
the Firm may invest in the public and non-public Securities and private debt markets,
|
(ii)
|
the Firm does not wish to receive MNPI,
|
(iii)
|
the purpose of speaking with such consultant is to obtain his/her independent insight as it relates to a particular industry, sector or company, and
|
(iv)
|
such consultant should not share any MNPI or confidential information that he/she may have a duty to keep confidential or that he/she otherwise should not disclose.
|
•
|
The Supervised Person should also confirm with such consultant that he/she will not be violating any agreement, duty or obligation such consultant may have with any employer or other institution.
|
•
|
Supervised Persons must keep and maintain logs of all call or conversations with such consultants, which should include the date/time of the conversation, the name of the consultant and a summary of the information discussed on the call.
|
•
|
In the event that a Supervised Person learns or has reason to suspect that he or she has been provided with confidential or MNPI relating to a Security from a consultant, the Supervised Person must immediately contact a Compliance Officer prior to either communicating such
|
IV.
|
GIFTS, ENTERTAINMENT AND POLITICAL ACTIVITIES
|
A.
|
INTRODUCTION
|
B.
|
GIFTS AND ENTERTAINMENT POLICY
|
5.
|
Travel and Lodging
|
6.
|
Providing Meals, Gifts and Entertainment to Public Officials and Union Employees
|
7.
|
Receipt of Meals, Gifts or Entertainment by Traders from Brokers/Agent Bank Employees
|
C.
|
POLITICAL ACTIVITY POLICY
|
V.
|
OUTSIDE AFFILIATIONS POLICY
|
A.
|
OUTSIDE BUSINESS ACTIVITIES
|
B.
|
DIRECTOR AND OFFICER POSITIONS
|
C.
|
EMPLOYEE RELATIONSHIPS
|
(a)
|
Requirements for Interaction with Public Officials
|
(b)
|
Requirements for Interaction with Private Sector Counterparty Representatives
|
(c)
|
Requirements for Retention of Certain Third Parties
|
(d)
|
Pre-Approval Reporting, Due Diligence and Contractual Requirements
|
•
|
gifts, meals, entertainment, travel or lodging provided to a Public Official or a person actually known to be an immediate family member or guest of a Public Official;
|
•
|
charitable donations made on behalf of OFS Adviser at the request of a Private Sector Counterparty Representative;
|
•
|
charitable donations made in an individual capacity or on behalf of OFS Adviser at the request of or for the benefit of a Public Official; and
|
•
|
political contributions made to any Public Official on behalf of OFS Adviser or at the request of an Outside Party.
|
By:
|
/s/ Bilal Rashid
|
|
|
Bilal Rashid
|
|
|
Chief Executive Officer
|
|
By:
|
/s/ Jeffrey A. Cerny
|
|
|
Jeffrey A. Cerny
|
|
|
Chief Financial Officer
|
|
|
|
/s/ Bilal Rashid
|
|
Name:
|
Bilal Rashid
|
|
Date:
|
March 15, 2019
|
|
|
/s/ Jeffrey A. Cerny
|
|
Name:
|
Jeffrey A. Cerny
|
|
Date:
|
March 15, 2019
|